Petros PACE Finance and MidCap Financial Provide Inaugural Joint Unitranche Financing for Newbuild Marriott Hotel in Knoxville

Single Source Solution Enables Developers to Secure Both Senior and C-PACE Financing

AUSTIN, Texas, July 1, 2025 /PRNewswire/ -- Petros Pace Finance (Petros), one of the largest C-PACE providers in the country and a leader in innovative structured finance, and MidCap Financial (MidCap), a specialty finance firm that provides senior debt solutions to companies across all industries, today announced the successful completion of its first joint unitranche transaction.

In this inaugural transaction, Petros, serving as the C-PACE lender, partnered with MidCap as the senior lender to provide a total of $39 million in unitranche financing for the new construction of an AC Hotel by Marriott in Knoxville, Tennessee, developed by Vector Hospitality. The financing includes $15 million in C-PACE funding from Petros and $24 million in senior debt from MidCap. Connor Murch of Petros and Bob Moran of MidCap structured the transaction to act as a single seamless construction loan solution.

"Offering unitranche financing is a significant step forward in Petros' evolution as a valued partner to our developer customers and a clear demonstration of our commitment to product innovation as a best-in-class lender," said Kevin McMeen, President and CEO of Petros. "This collaboration with MidCap, a respected senior lender, reflects the kind of strategic solutions we deliver to optimize borrower experiences and outcomes. We are excited about this transaction and expect it to be the first of many unitranche deals to come."

"At MidCap Financial, we pride ourselves on tailoring flexible financing solutions quickly and efficiently," said Richard Graham, Managing Director and Head of Commercial Real Estate at MidCap. "The unitranche structure helped streamline underwriting and made for a smooth, collaborative process. Petros presented a well-structured opportunity, and we look forward to partnering on future transactions that deliver innovative, efficient, and cost-effective capital solutions to developers and investors nationwide."

Petros and MidCap's unitranche structure combines C-PACE and first mortgage financing to provide a single source solution to investors and developers. The unitranche approach delivers a simplified solution to the customer as both the C-PACE and first mortgage provider size, structure, price and vet the deal in a coordinated manner that simplifies and accelerates the deal process for all parties involved in the transaction.

"This was the most seamless transaction I have ever experienced," said Aman Patel, President of Vector Hospitality. "Petros and MidCap earned our confidence and trust at every stage of the process. Thanks to their partnership, we are on track to deliver an award-winning hotel."

The AC Hotel project will be a 161-key property constructed in downtown Knoxville. It is expected to benefit from demand for lodging driven by the University of Tennessee, corporate headquarters, regional healthcare facilities, and other nearby institutions. The C-PACE financing will cover the cost of an energy-efficient HVAC system, enhanced building envelope, LED lighting, water-conserving plumbing, and other sustainable upgrades. Construction began in March 2025 and is anticipated to be completed by November 2026.

About Petros PACE Finance

Petros PACE Finance, LLC is the national leader in the C-PACE marketplace, dedicated solely to providing long-term C-PACE financing to commercial property owners seeking to lower energy costs, reduce their carbon footprint and increase property values and meet environmental, social and governance (ESG) goals. The company is a platform portfolio investment of Apollo Global Management. Its leadership team has decades of executive-level experience in private credit and structured finance, with direct long-term institutional investor relationships. With billions in committed capital, Petros is able to close transactions in eligible C-PACE markets nationwide. To learn more about Petros PACE Finance visit our website at www.petros-pace.com.

About MidCap Financial

MidCap Financial is a middle-market focused, specialty finance firm that provides senior debt solutions to companies across all industries. As of March 31, 2025, MidCap Financial provides administrative or other services for approximately $55 billion of commitments*. MidCap Financial is managed by Apollo Capital Management, L.P., a subsidiary of Apollo Global Management, Inc., pursuant to an investment management agreement. Apollo had assets under management of approximately $785 billion as of March 31, 2025.

For more information about MidCap Financial, please visit www.midcapfinancial.com.

For more information about Apollo, please visit www.apollo.com.

*Including $6.9 billion of commitments managed by MidCap Financial Services Capital Management LLC, a registered investment adviser, as reported under Item 5.F on Part 1 of its Form ADV

SOURCE Petros PACE Finance, LLC