Mansoor Ghori
CEO and Co-Founder at Petros PACE Finance
What are the key lending opportunities you see as we round out 2021?
Lending here at the end of 2021 and going into 2022 should continue to be about a rebounding economy, evidenced by increasing consumer spending, a strengthening hospitality market led by U.S. and other travelers getting back to business and pleasure trips, and even office space gaining momentum in key markets as companies incentivize or pressure employees to return. In Petros’ own universe, we see further expansion of the C-PACE market even as we experienced a really strong 2021, when most traditional financing sources tightened up. Some of the recent milestones and signs of go-forward strength for C-PACE include the opening of the huge New York City market where we were fortunate to have closed the largest-ever U.S. deal, 111 Wall Street; also the opening of new C-PACE markets including Nevada, Tennessee and soon-to-be Washington State and New Jersey; and the passing of the $2 billion mark in overall C-PACE financings since its debuted over 10 years ago.
Pick your poison (and tell us why you’d drink it): retail or hospitality?
Hospitality is the better ticket for the foreseeable future because people are starting to travel again, and there’s pent-up demand for hotel room nights. This is especially true as the borders open up again to foreign travelers who are rushing to return or vacation in the U.S. We have seen a significant uptick in hospitality transactions for C-PACE. Retail real estate, despite the boom in anticipated spending this holiday season, will likely still favor online sales. Additionally, many B and C retail properties will transform and be converted into other property types.
New York City: “I want to be a part of it”?
We are big believers in the New York City market in general, and in its adoption of C-PACE financing in particular. After that first deal in Manhattan just a couple of months ago, we are seeing a very healthy pipeline of interest from major landlords and investors. It should be the largest C-PACE market in the country as it continues to fully open up and new components — such as new construction eligibility requirements — get added into the program.
How prominent do you envision C-PACE financing becoming? Is it here to stay?
C-PACE is already here to stay, and it continues to be only an issue of market education, continued new market openings, and a “follow the leader” mentality now that more and more developers, investors, financial institutions, brokers, accountants and the like get C-PACE under their belts or hear about competitor successes and case studies. C-PACE is proving, time and again, to be a more consistent and standard part of a developer capital stack, especially with passing of more and more green climate initiatives and mandates in major cities and states across the country.
What’s the most important initiative President Biden can implement for the real estate industry?
In general, significant changes in capital gains rates, limitations on deductible expenses and changes in the step-up basis would have a negative effect on real estate property values and the industry. Since the president’s Build Back Better plan is still in flux with no certainty of the final tax policy changes, it is hard to say what effects it will have on the real estate industry. For the C-PACE sector, a strong push towards more carbon reduction and energy-efficiency policies, including things like tax credits, would be very helpful. C-PACE can help the entire commercial real estate industry build new, rehab or retrofit older properties to reduce their carbon footprint, save on operating costs and increase property value, all at the same time.
What keeps you up at night?
Other than a very active mind, my sleeplessness is due in part to me tracking the various political, economic and financial risks in the global market and how those risks effect the real estate and C-PACE industries. Specifically, for C-PACE, my major focus is on the commercial real estate industry’s awareness of how C-PACE addresses so many of owners’ and operators’ needs. We’ve barely tapped the surface, but it’s exciting to be part of a growth curve that also solves big problems.
Lighting Round
Stabilized or transitional assets?
Transitional.
First work trip post-COVID?
New York. [Petros is based in Austin.]
Fast-food guilty pleasure?
Mighty Fine burgers.
“Ted Lasso” or “The Morning Show?
“Ted Lasso.”
Peloton bike or outdoor cycling?
Peloton.
Last book you read?
“What it Takes: Lessons in the Pursuit of Excellence,” by Stephen A. Schwarzman.
Who would play you in the biopic of your life?
Cary Grant … ha, ha!
“If I hadn’t pursued a lending career I’d be …”
Pro basketball player … I wish!
