Kevin McMeen recently took the reins at Petros PACE Finance, one of the largest C-PACE providers in the country. As the Austin-based company’s President and CEO, he brings decades of commercial real estate lending and structured finance experience to an industry-leading platform that has nearly $2 billion in balance sheet-funded C-PACE transactions. He co-founded and led MidCap Financial, an Apollo portfolio company, from its inception in 2008. Connect CRE sounded out McMeen on his vision for Petros going forward and C-PACE’s growing profile in the broader commercial real estate finance industry.
Q: You’re in your first few months as CEO and President of Petros. What drew you to the company, and what excites you about leading it into its next phase?
A: I was drawn to Petros for many reasons, including the opportunity to leverage my broader real estate experience within the C-PACE industry. I knew this was a unique opportunity to join a strong team that’s already been leading the way forward in the real estate financing industry.
What excites me about the road ahead is building on that foundation. Petros has always been a leader in the C-PACE industry, and my goal is to continue that tradition while expanding our reach and deepening our institutional relationships. We’re focused on bringing in complementary talent with experience in complex transactions and deep ties to institutional investors. That will be key as we work to drive broader acceptance of C-PACE in the institutional market. We are also working to refine our capital strategy, identifying ways to be more cost-effective in the debt stack, opening new investor relationships, and ultimately lowering the cost of capital. All of this positions us to be more competitive and more active in a growing market.
Q: Petros is a recognized leader in the C-PACE space, but how do you view its role more broadly as a commercial real estate capital provider?
A: At the end of the day, what we offer is affordable capital for commercial real estate projects. C-PACE financing has to be used for energy-efficient and sustainable property measures, and that’s a good thing, but our broader value is giving customers access to capital that makes financial sense. There are other financing solutions out there, so we know developers don’t have to use C-PACE. It’s up to us to make sure that our offering is truly compelling. That means competitive pricing, a user-friendly process, best-in-class service, and term sheets that are executable and reliable. That’s what makes Petros both a leader in C-PACE and a trusted capital provider in commercial real estate.
Q: What makes Petros uniquely positioned to continue deploying capital when the market tightens or economic conditions become uncertain?
A: At Petros, we are focused on getting our originations and underwriting teams on the same page from a credit perspective and working closely together to make sure we’re thoughtfully approaching each transaction. We do that in any economic market, but when conditions shift, we have to make adjustments too. Sometimes that means adjusting how we think about pricing or finding creative ways to structure deals while in a shifting interest rate environment. We also focus on being the best possible partner so we can attract top-tier, sophisticated sponsors with their own skin in the game, who are ready to work together to get the deal done.
Q: Petros recently closed its first joint unitranche transaction. What does this structure offer borrowers, and how does it align with your broader strategy?
A: Unitranche, which simply means we partner with a first mortgage lender to offer a single, streamlined financing solution, gives our borrowers what they value most: simplicity and efficiency. It ties directly back to our commitment to providing best-in-class service and making our offerings as compelling as possible. We want developers to know they can come to us not only for fast, affordable capital but also for access to our network of senior lenders who understand the value of incorporating C-PACE into the capital stack.
Q: How is C-PACE penetrating the large loan market, and how do you see deal size, structure, and sophistication evolving as the market matures?
A: C-PACE is steadily gaining traction in the institutional market, and one of the biggest drivers is how we structure deals. Historically, C-PACE loans were fully funded up front, which often created negative arbitrage. At Petros, we’ve been addressing that by developing multi-tranche deal structures, which make capital use more efficient for both the lender and the borrower. That’s just one example of how deal structures and transaction sophistication are evolving as larger players enter the space. We’ll continue to find creative ways to evolve and win business. Ultimately, it’s on us to push past existing boundaries and help the industry continue to grow – and I’m excited to be leading that work at Petros.
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