Former baseball star Alex Rodriguez and his investment firm are the lead investors in a $10 million funding round for Austin-based Petros PACE Finance.
Petros provides long-term PACE financing to U.S. commercial property owners seeking to increase their property values and finance energy conservation.
Rodriguez, who played 22 seasons in Major League Baseball, has invested in commercial and residential real estate since 2004 through his investment firm, A-ROD Corp.
His portfolio includes the ownership and management of more than 10,000 multifamily apartment units in 10 states.
The PACE lending program was approved by the Texas Legislature in 2013 as a way to make it easier for owners of commercial, industrial and non-profit facilities to finance water and energy conservation without incurring up front costs.
“Commercial PACE is a nascent industry with tremendous growth potential,” Rodriguez said in a statement. “I’m excited to invest in Petros PACE and look forward to leveraging my real estate experience to help the company expand and introduce this innovative financing tool to commercial property owners in new markets across the nation.”
PACE stands for property assessed clean energy. Under the program, loans are repaid over an extended period of time through special property tax assessments. If the property is sold before the load is repaid, the repayment obligation automatically transfers to the next owner because the lien securing the tax assessment follows the title to the property.
To receive a PACE loan, the energy and water savings must be enough to cover the loan payments. Thirty-two states and Washington D.C. have launched PACE programs.
Petros PACE was founded in 2014 by Mansoor Ghori, formerly a venture partner at private equity firm Sentient Ventures, and Jim Stanislaus, formerly chief financial officer and chief operating officer at Enhanced Capital.
Tommy Deavenport, formerly founder and managing director of Square 1 Bank, is chief operating officer of Petros.
“Alex is a highly accomplished and well-respected businessman with unmatched relationships in the commercial real estate industry,” said Ghori, Petros CEO. “This investment will help fuel our expansion in this growing industry.”
Petros previously raised $2.7 million in funding. Last year, the company funded transactions in seven states, and was the first to close deals in four of those states, Ghori said.
Ghori said Rodriguez has already helped Petros make new business connections.
“If you look at his Rolodex, it is the top of the top,” he said. “One of the things he has already started doing is opening these doors. We are now actively engaged with some large companies to partner with us on their commercial property portfolios.”
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