Insider insights, expert opinions.

Latest Updates.

Press Release
5 min read

Peachtree Group Expands Executive Team with New Elevations

Peachtree Group announced the elevation of three senior executives, expanding their roles to strengthen the firm’s executive leadership team. The promotions include Michael Harper to president of hotel lending, Jared Schlosser to executive vice president of hotel lending and head of CPACE and Michael Ritz to executive vice president of investments.
Jared Schlosser, Michael Harper, Michael Ritz

ATLANTA (April 3, 2024) – Peachtree Group ("Peachtree") announced the elevation of three senior executives, expanding their roles to strengthen the firm’s executive leadership team. The promotions include Michael Harper to president of hotel lending, Jared Schlosser to executive vice president of hotel lending and head of CPACE and Michael Ritz to executive vice president of investments.

"These appointments underscore Peachtree's commitment to its core growth initiatives in hotel lending, as well as fostering talent from within our own ranks, with an eye toward further diversifying its allocation strategies as it taps into new investment opportunities," said Greg Friedman, Peachtree's CEO and managing principal.

Since joining Peachtree in 2014, Harper has distinguished himself through a succession of leadership roles, directing the company's credit business, particularly in loan originations and strategic acquisition of credit portfolios. Since joining, he has led the team through over 500 investments totaling over $6 billion. As president, he is responsible for the entirety of Peachtree's credit platform for hotels, guiding all facets of the credit business.

Schlosser's promotion to executive vice president of hotel lending and head of CPACE reflects his exceptional performance and extensive knowledge of the hotel loan origination processes and the firm's Commercial Property Assessed Clean Energy (CPACE) program. His significant contributions since joining the firm in 2019 have been crucial in advancing Peachtree's CPACE program, which now exceeds $800 million in transactions and has become one of the largest in the U.S. Furthermore, since taking over hotel originations at the start of 2022, Peachtree has completed more than $1.5 billion in hotel loans, further demonstrating his expertise and effectiveness in these dual roles.

Ritz has been elevated to the position of executive vice president of investments and will oversee Peachtree's credit and equity investments across commercial real estate and other ventures.  He joined Peachtree in 2017, and his promotion recognizes his expertise in successfully managing and growing a portfolio of investments that is now approaching $10 billion in transaction asset value.

 

Peachtree was recently ranked as the tenth largest U.S. commercial real estate hotel lender, its third consecutive year in the top ten, by the Mortgage Bankers Association ("MBA") 2023 loan origination rankings.

About Peachtree Group
Peachtree Group is a vertically integrated investment management firm specializing in identifying and capitalizing on opportunities in dislocated markets, anchored by commercial real estate. Today, we manage billions in capital across acquisitions, development, and lending, augmented by services designed to protect, support and grow our investments. For more information, visit www.peachtreegroup.com.

Contact:

Charles Talbert

678-823-7683

ctalbert@peachtreegroup.com

Press Release
5 min read

Peachtree Group Ranked among the Largest Commercial Real Estate Investor-Driven Lenders in U.S.

Peachtree Group ranked as the seventh largest U.S. commercial real estate investor-driven lender by the Mortgage Bankers Association ("MBA") 2023 loan origination rankings. In 2023, Peachtree deployed over $1.0 billion in commercial real estate credit investments. In addition, Peachtree ranked as a top-10 lender in the hotel sector for a third consecutive year.

ATLANTA (April 2, 2024) – Peachtree Group ("Peachtree") ranked as the seventh largest U.S. commercial real estate investor-driven lender by the Mortgage Bankers Association ("MBA") 2023 loan origination rankings. In 2023, Peachtree deployed over $1.0 billion in commercial real estate credit investments.

Peachtree was also ranked as the tenth largest U.S. commercial real estate hotel lender, its third consecutive year in the top ten. In addition, the firm was among the leading lenders in the retail, multifamily, industrial and 'other' sectors.  

"We have experienced a wave of activity since the fourth quarter of 2023, driven by the expectation of persistent high-interest rates and a constrained lending environment from banks," said Greg Friedman, Peachtree's CEO and managing principal. "With traditional lenders stepping back, we have seen a pronounced shift in the capital markets at a time when there is a steep increase in debt maturities within the industry, potentially nearing $1 trillion in this year alone."

Amid the debt market dislocation, Peachtree has already deployed nearly $1.0 billion in credit transactions this year.

"The tidal wave of maturities and trillions of dollars more through 2028 favors private credit lenders like Peachtree to capitalize on these opportunities and close the funding gap left by traditional capital channels," Friedman said.

As a direct commercial real estate lender, Peachtree offers permanent loans, bridge loans, mezzanine loans commercial property-assessed clean energy (CPACE) financing and preferred equity investments across all commercial real estate sectors.

Stakeholders in the commercial real estate arena are navigating through this era marked by rising capital costs and limited liquidity. These conditions are particularly challenging when securing necessary capital for acquisitions, recapitalization and development initiatives.

"Years of dedicated effort in building our capital foundation have equipped us to support real estate owners in executing their business strategies, a commitment that remains firm even during uncertain times," Friedman concluded.

About Peachtree Group
Peachtree Group is a vertically integrated investment management firm specializing in identifying and capitalizing on opportunities in dislocated markets, anchored by commercial real estate. Today, we manage billions in capital across acquisitions, development, and lending, augmented by services designed to protect, support and grow our investments. For more information, visit www.peachtreegroup.com.

Contact:

Charles Talbert

678-823-7683

ctalbert@peachtreegroup.com

Insight
5 min read

Safe Harbor in Choppy Waters: Hotels Resilient in Volatile Market

Peachtree Group's most recent webinar features Bryan Younge, EVP at Newmark, discussing the hotel industry in the post-COVID era. In his analysis he says the industry is marked by strong fundamentals, limited supply and increased capital inflows making it an attractive investment option.

The hotel industry has had a remarkable recovery in the post-COVID era, marked by strong fundamentals, limited supply and increased capital inflows, making it an attractive investment option.

Peachtree Group CEO Greg Friedman sat down with Bryan Younge, executive vice president at Newmark to discuss this remarkable recover and where the market is today. Bryan heads the hospitality practice group at Newmark and is a leading commercial real estate advisor. Below is a recap of his expert analysis and insights.

Listen to Peachtree's discussion with Bryan Younge, EVP Newmark here.

 

Hotel Industry Comeback

The industry witnessed an unprecedented come back after the pandemic. 

 

Limited New Hotel Supply: Limited new hotel supply coinciding with high travel demand creates a favorable scenario for the existing hotel inventory to capitalize on the surging interest.

 

Investment Attractiveness: The hotel sector's resilience has increased its appeal as an investment vehicle, offering substantial returns. This is reflected in the significant capital and dry powder ready for investment in this sector.

 

Macro Challenges: Despite its success, the industry faces challenges like staffing shortages, wage growth and inflation.

 

Hotel Performance – Segment: Closely examined the performance across various segments of the hotel industry, including commercial, group, leisure, and extended stay, as well as different distribution channels. These channels are crucial for predicting occupancy trends and Average Daily Rate (ADR), especially in the current volatile inflationary environment.

 

Key observations include:

  • The group segment, crucial for hotel revenue, experienced a significant decline during the pandemic but has recently fully recovered.
  • Other segments, like online travel agents (OTAs) and FIT (Foreign Independent Travel) and wholesale channel, outperformed group and global distribution     systems (GDS) in terms of recovery.
  • The FIT and wholesale channel had a substantial initial setback but rebounded strongly in spring 2022, reaching levels 70% higher than in 2019.
  • Seasonality patterns, resembling a heartbeat monitor, show three demand spikes in mid-spring, summer, and October, indicating a return to normalcy and     balanced pricing strategies.
  • Overall, the analysis suggests that while larger hotels faced challenges during the pandemic, smaller hotels remained more resilient due to less reliance on group bookings and other factors. 
  • The current trends indicate a recovery and adaptation in the hotel industry's various segments.

 

Predictive Analysis: Discussed methods for predicting future pricing trends in the hotel industry, including analyzing room rates and booking adjustments, the personal savings rate and its impact on the travel sector, and the performance of different hotel market segments and their recovery post-pandemic.

 

Transaction Market: An equilibrium is emerging in the transaction market, with buyers and sellers reaching common ground and avoiding distressed pricing. This indicates a healthy market with growth potential and abundant opportunities. 

Insight
5 min read

Why Lenders Require Comfort Letters for Branded Hotel Financing

Investing in a franchise hotel can be a good way to diversify your portfolio and to achieve solid returns over an extended period of time. Comfort letters are designed to provide a legal framework for lenders and franchisors to handle situations in which the hotel purchaser defaults on the loan. Here are some facts ever investor should know about comfort letters.

Investing in a franchise hotel can be a good way to diversify your portfolio and to achieve solid returns over an extended period of time. Finding the right hotel financing options can make this acquisition even more profitable. Comfort letters are designed to provide a legal framework for lenders and franchisors to handle situations in which the hotel purchaser defaults on the loan. Here are some facts ever investor should know about comfort letters.

What are Comfort Letters?

Comfort letters are documents that allow lenders to assume franchise rights if the original franchisee defaults on the loan. These letters include provisions that ensure that lenders can continue to operate the hotel in the event of default or foreclosure on franchise hotel loans.

Benefits of Comfort Letters

Comfort letters offer several benefits for all parties involved in the transaction, including the following:

  • Borrowers are more likely to find the most attractive hotel lending arrangements if the lenders have greater certainty that they will be able to recoup their investment even if the borrower defaults. This can improve the terms of these loans and can make it easier to obtain the financing needed to acquire franchise properties.
  • Lenders can more effectively collateralize their loans by ensuring the ability to maintain the profitability of the properties they finance.
  • Franchise companies can protect their brand name by continuing operations and maintain a presence even when franchisees fail to meet their financial obligations and go into default on their hotel loans.

Many lenders require comfort letters before they will finalize loans for franchise hotel properties.

Crafted by the Franchise Company

In most cases, the comfort letter is drawn up by the franchise company as part of the franchising process. These legal documents may follow a standardized template or may be customized to suit the needs of the borrower and the lender. The contents of the letter may include some or all of the following provisions:

  • A provision that ensures the ability of the lender to appoint a receiver to operate the hotel for a short period of time during foreclosure proceedings.
  • A clause that allows the lender to cure any default of the franchise agreement before it is terminated.
  • A provision that allows for the resale of the property and the transfer of the franchise agreement to a third party if the hotel goes into default.

These provisions are designed to protect the lender if the hotel financing loan goes into default.

About Peachtree Group

Peachtree Group is a direct lender with a specialty in hospitality lending. Our originators work with investors across the US to provide the most practical hotel financing arrangements for their specific needs. Contact us today to discuss your financial needs with one of our expert loan originators. We work with you to provide the best options for your hotel financing requirements.

Press Release
5 min read

Peachtree Group Acquires Hilton Garden Inn Denver Tech Center

Peachtree Group ("Peachtree") announced the acquisition of the 180-room Hilton Garden Inn Denver Tech Center in Denver, Colo. Peachtree's hospitality management team will operate the property.

Peachtree Group ("Peachtree") announced the acquisition of the 180-room Hilton Garden Inn Denver Tech Center in Denver, Colo. Peachtree's hospitality management team will operate the property.

The seven-story hotel is ideally located in the heart of the Denver Tech Center, one of the Denver MSA's prominent employment hubs and the largest office submarket outside of the Central Business District, with 8.8 million sq. ft. of Class-A space. The area is situated near the intersection of Interstate 25 and Interstate 225, providing direct access to the Denver CBD and Denver International Airport.

The hotel further benefits from its proximity to the under-development Bellview Station, a 50+ acre, transit-oriented, mixed-use development. Upon completion, Bellview Station will comprise 2.2 million sq. ft. of Class-A office, 300,000 sq. ft. of retail; 1,800 high-end residential units and 5.0+ acres of green space. Prominent area employers include Comcast, Oracle, Microsoft, Zoom, Charles Schwab, Fidelity Investments, Newmont Mining and Western Union. The Bellview RTD light rail station provides direct commuter access to Union Station and Denver International Airport.

"We are excited to acquire this premium-branded hotel in a growing submarket with a variety of diverse and stable demand generators," said Michael Bernath, Peachtree's senior vice president, acquisitions. "The Denver economy is well diversified, with the city gaining recognition as a burgeoning tech hub. We believe the expansion of the R-Line, increased connectivity of the area and the completion of the transformative Bellview Station development will continue to make the Denver Tech Center an attractive destination for consumers and corporations alike."

 The hotel was last renovated in 2014. Peachtree will make substantial investments in the property, with comprehensive upgrades and enhancements to the entirety of the property, including the exterior, lobby area, bar and lounge, meeting rooms, guestrooms, guest baths, corridors, elevators and stairwells.

 "Upon renovation, the hotel will be the newest renovated property in the area and will be positioned to command a significant premium in daily rates," Bernath said.

 The Hilton Garden Inn Denver Tech Center marks Peachtree's second hotel in Denver, following its ownership of the Element Denver Park Meadows in Lone Tree.

 The financial terms of the transactions were not disclosed.

About Peachtree Group

Peachtree Group is an investment firm driving growth with a diverse portfolio of commercial real estate assets and other ventures. We’ve executed hundreds of investments since inception with a focus on real estate acquisition, development, and lending. Today, we manage billions in equity, augmented by services designed to protect, support, and grow our investments.

 

Press Release
5 min read

Peachtree Group Successfully Closes Third Delaware Statutory Trust, Providing Prime Opportunity for 1031 Exchange Investors

ATLANTA (Feb. 5, 2024) – Peachtree Group, a leading commercial real estate investment firm with a $6.4 billion portfolio of equity and debt investments, announces the successful closure of its third hotel property structured as a Delaware Statutory Trust (DST) with the completed acquisition of its 98-key Hilton Garden Inn in Jackson, Tenn.

ATLANTA (Feb. 5, 2024) – Peachtree Group, a leading commercial real estate investment firm with a $6.4 billion portfolio of equity and debt investments, announces the successful closure of its third hotel property structured as a Delaware Statutory Trust (DST) with the completed acquisition of its 98-key Hilton Garden Inn in Jackson, Tenn.

The Hilton Garden Inn is well located in West Tennessee, offering direct access to diverse demand drivers in the area.

"The hotel's strategic location near healthcare and manufacturing jobs, including Ford's planned $5.6 billion Blue Oval City, along with a diverse collection of entertainment and retail destinations, establishes it as a valuable addition to our expanding portfolio of DST properties," said Tim Witt, Peachtree Group's president, 1031 Exchange/DST Products.

This strategic acquisition presented a compelling opportunity for1031 exchange investors seeking to reinvest proceeds from the sale of appreciated real estate while enjoying tax deferral benefits and maintaining a robust allocation to real estate.

Since forming its DST program in Aug. 2022, Peachtree Group has quickly become a top-15 sponsor in the securitized 1031 exchange marketplace, according to a year-end market equity update from Mountain Dell Consulting.

The other two DST acquisitions included the 100-key Courtyard by Marriott Atlanta Kennesaw (Atlanta MSA) and the 126-key Home2 Suites by Hilton Chandler (Phoenix MSA). These two properties also benefit from strong, growing and diversified demand drivers.

All three acquisitions, totaling more than $83.8 million in real estate-related transactions, were acquired debt-free.

Peachtree Group underscores its commitment to innovation and investor satisfaction, aligning with the core principles of the 1031 exchange and offering investors a seamless avenue to transition capital gains into a new passive investment, particularly within the thriving hotel sector.

"Hotels represent an enticing investment due to the enduring secular trends that propel them forward. The anticipated growth in travel-related expenditure, expected to grow from $10 trillion to $15 trillion over the next decade, fuels the optimistic outlook. Moreover, hotels stand to benefit from the enduring imbalance between growing demand and slower supply, further solidifying hotels' position as a resilient investment," Witt said.

About Peachtree Group

Peachtree Group is an investment firm driving growth with a diverse portfolio of commercial real estate assets and other ventures. We’ve executed hundreds of investments since inception with a focus on real estate acquisition, development, and lending. Today, we manage billions in equity, augmented by services designed to protect, support, and grow our investments.

Peachtree In The News

Peachtree Group executives are often quoted in the news. Read the latest.

In The News
5 min read

Gramercy Park Media and Gala Media Capital: Thriller From Zak Hilditch

Georgia Entertainment - Daisy Ridley has found her next project – a survival thriller from Zak Hilditch, director of Stephen King adaptation 1922. Ridley, who plays Rey in the Star Wars sequel trilogy and is returning to franchise in the next film, will star in We Bury the Dead.

Daisy Ridley has found her next project – a survival thriller from Zak Hilditch, director of Stephen King adaptation 1922. Ridley, who plays Rey in the Star Wars sequel trilogy and is returning to franchise in the next film, will star in We Bury the Dead. Read more from Georgia Entertainment.

In The News
5 min read

BlueStar Studios, a $180 Million Film and TV Production Center, to Open in Atlanta

Variety - Atlanta adds a major production hub with the addition of BlueStar Studios. The project represents a total investment of $180 million. Atlanta-based Gala Media Capital, a division of private equity firm Peachtree Group, originated the financing for construction of phase one of the studio development.

Atlanta will continue to grow as a major production hub with the addition of BlueStar Studios, a 53-acre campus now under construction in nearby Forest Park, Ga., that will start operations in the summer of 2023.

The project represents a total investment of $180 million. Development will continue in phases through 2024. Atlanta-based Gala Media Capital, a division of private equity firm Peachtree Group, originated the financing for construction of phase one of the studio development.

Read more in Variety.

In The News
5 min read

Aaron Eckhart Action - Thriller 'Muzzle" Sells to RLJE

Variety - RLJE announced it has acquired North American rights to “Muzzle,” an action thriller starring Aaron Eckhart, from Highland Film Group. Directed by John Stalberg Jr. (“Crypto”) and based on a script by Carlyle Eubank (“The Signal”) from a story by Eubank and Stalberg Jr., the film is set to debut in theaters and will be made available on all rental platforms on Sept. 29.

RLJE announced it has acquired North American rights to “Muzzle,” an action thriller starring Aaron Eckhart, from Highland Film Group.  Directed by John Stalberg Jr. (“Crypto”) and based on a script by Carlyle Eubank (“The Signal”) from a story by Eubank and Stalberg Jr., the film is set to debut in theaters and will be made available on all rental platforms on Sept. 29. Read more in Variety.

Press Releases & Insights

Learn more about what Peachtree Group has to say about our industry.

Press Release
5 min read

Peachtree Group Expands Executive Team with New Elevations

Peachtree Group announced the elevation of three senior executives, expanding their roles to strengthen the firm’s executive leadership team. The promotions include Michael Harper to president of hotel lending, Jared Schlosser to executive vice president of hotel lending and head of CPACE and Michael Ritz to executive vice president of investments.
Jared Schlosser, Michael Harper, Michael Ritz

ATLANTA (April 3, 2024) – Peachtree Group ("Peachtree") announced the elevation of three senior executives, expanding their roles to strengthen the firm’s executive leadership team. The promotions include Michael Harper to president of hotel lending, Jared Schlosser to executive vice president of hotel lending and head of CPACE and Michael Ritz to executive vice president of investments.

"These appointments underscore Peachtree's commitment to its core growth initiatives in hotel lending, as well as fostering talent from within our own ranks, with an eye toward further diversifying its allocation strategies as it taps into new investment opportunities," said Greg Friedman, Peachtree's CEO and managing principal.

Since joining Peachtree in 2014, Harper has distinguished himself through a succession of leadership roles, directing the company's credit business, particularly in loan originations and strategic acquisition of credit portfolios. Since joining, he has led the team through over 500 investments totaling over $6 billion. As president, he is responsible for the entirety of Peachtree's credit platform for hotels, guiding all facets of the credit business.

Schlosser's promotion to executive vice president of hotel lending and head of CPACE reflects his exceptional performance and extensive knowledge of the hotel loan origination processes and the firm's Commercial Property Assessed Clean Energy (CPACE) program. His significant contributions since joining the firm in 2019 have been crucial in advancing Peachtree's CPACE program, which now exceeds $800 million in transactions and has become one of the largest in the U.S. Furthermore, since taking over hotel originations at the start of 2022, Peachtree has completed more than $1.5 billion in hotel loans, further demonstrating his expertise and effectiveness in these dual roles.

Ritz has been elevated to the position of executive vice president of investments and will oversee Peachtree's credit and equity investments across commercial real estate and other ventures.  He joined Peachtree in 2017, and his promotion recognizes his expertise in successfully managing and growing a portfolio of investments that is now approaching $10 billion in transaction asset value.

 

Peachtree was recently ranked as the tenth largest U.S. commercial real estate hotel lender, its third consecutive year in the top ten, by the Mortgage Bankers Association ("MBA") 2023 loan origination rankings.

About Peachtree Group
Peachtree Group is a vertically integrated investment management firm specializing in identifying and capitalizing on opportunities in dislocated markets, anchored by commercial real estate. Today, we manage billions in capital across acquisitions, development, and lending, augmented by services designed to protect, support and grow our investments. For more information, visit www.peachtreegroup.com.

Contact:

Charles Talbert

678-823-7683

ctalbert@peachtreegroup.com

Press Release
5 min read

Peachtree Group Ranked among the Largest Commercial Real Estate Investor-Driven Lenders in U.S.

Peachtree Group ranked as the seventh largest U.S. commercial real estate investor-driven lender by the Mortgage Bankers Association ("MBA") 2023 loan origination rankings. In 2023, Peachtree deployed over $1.0 billion in commercial real estate credit investments. In addition, Peachtree ranked as a top-10 lender in the hotel sector for a third consecutive year.

ATLANTA (April 2, 2024) – Peachtree Group ("Peachtree") ranked as the seventh largest U.S. commercial real estate investor-driven lender by the Mortgage Bankers Association ("MBA") 2023 loan origination rankings. In 2023, Peachtree deployed over $1.0 billion in commercial real estate credit investments.

Peachtree was also ranked as the tenth largest U.S. commercial real estate hotel lender, its third consecutive year in the top ten. In addition, the firm was among the leading lenders in the retail, multifamily, industrial and 'other' sectors.  

"We have experienced a wave of activity since the fourth quarter of 2023, driven by the expectation of persistent high-interest rates and a constrained lending environment from banks," said Greg Friedman, Peachtree's CEO and managing principal. "With traditional lenders stepping back, we have seen a pronounced shift in the capital markets at a time when there is a steep increase in debt maturities within the industry, potentially nearing $1 trillion in this year alone."

Amid the debt market dislocation, Peachtree has already deployed nearly $1.0 billion in credit transactions this year.

"The tidal wave of maturities and trillions of dollars more through 2028 favors private credit lenders like Peachtree to capitalize on these opportunities and close the funding gap left by traditional capital channels," Friedman said.

As a direct commercial real estate lender, Peachtree offers permanent loans, bridge loans, mezzanine loans commercial property-assessed clean energy (CPACE) financing and preferred equity investments across all commercial real estate sectors.

Stakeholders in the commercial real estate arena are navigating through this era marked by rising capital costs and limited liquidity. These conditions are particularly challenging when securing necessary capital for acquisitions, recapitalization and development initiatives.

"Years of dedicated effort in building our capital foundation have equipped us to support real estate owners in executing their business strategies, a commitment that remains firm even during uncertain times," Friedman concluded.

About Peachtree Group
Peachtree Group is a vertically integrated investment management firm specializing in identifying and capitalizing on opportunities in dislocated markets, anchored by commercial real estate. Today, we manage billions in capital across acquisitions, development, and lending, augmented by services designed to protect, support and grow our investments. For more information, visit www.peachtreegroup.com.

Contact:

Charles Talbert

678-823-7683

ctalbert@peachtreegroup.com

Press Release
5 min read

Debt Market Dislocation Creates $1 Billion Opportunity for Peachtree Group

Peachtree Group is thriving amid debt market dislocation, and anticipates deploying $1.0 billion in real estate credit investments within six months. ‍The credit investments primarily encompass originations for hotels, multifamily, industrial and student housing. In February, Peachtree closed one of the largest individual credit transactions in the firm's history with a $102.9 million three-year loan to recapitalize a 350‐room Marriott branded hotel in Sunnyvale, Calif.

ATLANTA (March 18, 2024) – Peachtree Group (“Peachtree”), a diversified commercial real estate investment firm, announced it has closed approximately $660 million in credit investments since Dec. 1, 2023, with an additional $350 million anticipated closing over the next 30 to 45 days.

The credit investments primarily encompass originations for hotels, multifamily, industrial and student housing.


In February, Peachtree closed one of the largest individual credit transactions in the firm's history with a $102.9 million three-year loan to recapitalize a 350‐room Marriott dual-brand AC Hotel Sunnyvale Moffett Park and TETRA Hotel, Autograph Collection in Sunnyvale, Calif.

The AC Hotel Sunnyvale Moffett Park

 

"We are witnessing heightened activity in response to the anticipation of sustained elevated interest rates and continued reductions in bank exposure. The pressing need to refinance maturing debt, estimated at $2.8 trillion in U.S. commercial real estate debt by the end of 2028, is a growing concern. Commercial real estate stakeholders are grappling with the challenges of increased capital costs and constrained liquidity, particularly in securing capital for acquisitions, recapitalizations and development initiatives,” said Greg Friedman, Peachtree Group’s managing principal and CEO.

Peachtree Group's credit division, formerly Stonehill, ranked as the 8th largest U.S. commercial real estate hotel lender by the Mortgage Bankers Association in its last loan origination rankings.

As a direct commercial real estate lender, it offers permanent loans, bridge loans, mezzanine loans, commercial property-asset clean energy (CPACE) financing and preferred equity investments across all commercial real estate sectors, with its origins in the hospitality industry.

Other notable credit transactions closed over the past 90 days:

  • $40.8 million first mortgage loan for the construction of a dual-branded Residence Inn and Home2 Suites in Montgomery, Ala.
  • $46.0 million in Commercial Property Assessed Clean Energy (“CPACE”) financing for the Thompson Hotel in Palm Springs, Calif.  
  • $36.2 million first mortgage loan for Courtyard by Marriott in Chevy Chase, Md.
  • $40.6 million first mortgage loan for Home2 Suites in Charlotte, N.C.
  • $34.5 million first mortgage loan for a multifamily complex in Gainesville, Fla.
  • $17.5 million first mortgage loan for student housing in Athens, Ga.  

About Peachtree Group
Peachtree Group is a vertically integrated investment management firm specializing in identifying and capitalizing on opportunities in dislocated markets, anchored by commercial real estate. Today, we manage billions in capital across acquisitions, development, and lending, augmented by services designed to protect, support and grow our investments. For more information, visit www.peachtreegroup.com.

###

Contact:

CharlesTalbert

678-823-7683

ctalbert@peachtreegroup.com

Market Report

Read our managing principals' informed insights on the industry's latest developments.

Market Report
5 min read

Q4 Insights: 2022 - Record Year for Investment

The last three years have been turbulent with numerous events unprecedented events, yet even with these headwinds, 2022 was another record year of investment activity for Peachtree Group

The last three years have been turbulent, and I could point to numerous events thathave been unprecedented: a global pandemic, record-high inflation, geopolitical events and rising interest rates—all of these macroeconomic issues we have had to navigate. Yet, even with these headwinds, 2022 was another record year of investment activity for us. In addition, we solidified Peachtree's foundation for our next growth phase and continued to expand our investment offerings. I feel confident in saying we are meeting the moment.

Another macroeconomic issue is looming, and that is the prospect of a recession. It is worth noting that no two are alike, and if a downturn does occur, I believe it will be shallow and short-lived.

As a member of the Real Estate Roundtable, which includes executives from the toppublicly held and privately owned real estate ownership, development, lending and management firms in the U.S., we were recently asked about current market conditions and the future outlook in real estate. The consensus among these executives is that while uncertainty remains, there is optimism about future market conditions.

Of note from the survey: "This is not like the Global Financial Crisis of 2008 for a couple of reasons. First, more firms are not overleveraged. Second, firms still have capital to invest; there's just a higher threshold required to invest than in the past few years."

Further, the group also expressed that perceptions and outlooks differ across asset classes, as some sectors remain strong and others show concerns. While any recession has the potential to reduce demand, each sector has its own dynamics.I have sung the praises of hospitality in previous letters and will continue to do so inthis one. The industry's fundamentals remain strong, and the long-term growth trends will outweigh near-term macroeconomic headwinds. The acquisition market for premium-branded hotels, which was slow last year, is improving. Also, higher interest rates are compelling to be a lender as you can achieve equity-like returns. By the sheer number of opportunities we are reviewing, transaction velocity will pick up for us. We are following our sound investment and underwriting decisions and recommendations that served us well these past few years – focus on the underlying asset's investment basis with the right hotel brand in the right submarket with the right drivers of demand. These assets will outperform competitors on average and protect us from downside risk.

The opportunities we are experiencing in hospitality are happening across other sectors, and now we have the in-house capabilities to pivot to these investments. Todate, we have deployed hundreds of millions of dollars in investments beyond hospitality with loan originations and mortgage loan purchases. Our CRE lending group, Stonehill CRE, started at a fortuitous time with volatile market conditions creating a dislocated lending environment.

The current Secured Overnight Financing Rate (SOFR) curve, a broad measure of the cost of borrowing, forecasts rates to remain elevated through the year with rates normalizing in 18-24 months. Short-term disruptions and uncertainty will not stop us from investing in the market and extending credit for the right deals.For example, the CRE group has completed several transactions in the retail sector. The properties are five malls which have sound occupancy levels and debt service coverage ratios with strong sponsors who have solid plans to stabilize cash flow levels, which took a hit during the pandemic.

As quoted in the Commercial Observer, Daniel Siegel, president of Stonehill CRE, described the rationale for these investments: " The one thing that these transactions all have in common is the malls are all trading at 30% of the last trade value. So, all of these are situations where we feel that the headline risk associated with the asset class has become outpaced with the actual cash flow of the assets themselves."

The cyclical nature of commercial real estate is well known, and as an experienced investor, we are well-prepared to take advantage of market disruptions. During an economic downturn, overleveraged owners will need to transact, which presents opportunities for us to acquire properties at a lower cost basis or provide financing. We are prepared for slower GDP growth and continued volatility in asset pricing. Accordingly, we will balance risk and return, with a focus on properties and sectors that can weather economic volatility and stay prepared to take advantage of future opportunities that arise during this period.

I am confident in our ability to find opportunities in all market conditions.Thank you for your confidence in Peachtree and within the partnership. We all remain passionate about reaching our investment objectives together.Greg Friedman

Market Report
5 min read

Q2 Insights: Capitalizing on Disruption

Distruption is not the end of stability; instead it is the catalyst for innovation, growht and the evolution of industries. Peachtree Group has been an integral player in private credit since the GFC and sees tremendous opportunity in this space.

Disruption is not the end of stability; instead, it is the catalyst for innovation, growthand the evolution of industries.

This sentiment was evident during the disruption that rattled traditional financial institutions during the Global Financial Crisis (GFC), causing, among other things, banks to restrict lending.

During the tumultuous aftermath of the crisis, banks recalibrated their lending strategies, leaving a void in the market. This vacuum was swiftly filled by the emergence of private credit, a dynamic sector that embraced innovation to navigate the disruption. This shift provided commercial real estate ownership groups with the flexible and tailored financing solutions they needed to weather the uncertainties of the time.

In the wake of these changes, private credit witnessed exponential growth, with assets under management tripling to approximately $1.5 trillion. This rise underscores the resilience and adaptability of this sector in meeting the evolving needs of borrowers.

Peachtree Group has been an integral player in private credit since the GFC, with our investment strategies evolving as conditions change.With a holistic view of the market, we understand real estate owners' issues and canstructure and close loans that meet owners' complex and unique needs, regardless of the sector.

It has been a period of prosperity on the credit side of Peachtree Group. We have more than doubled credit transactions over the past three years, and there's more opportunity ahead for Peachtree Group to play a meaningful role in the commercial real estate lending landscape.

Current data would indicate that the market is facing a maturity wave that would make the 2015-2017 wave nearly insignificant by comparison. In that timeframe, approximately $1.1 trillion of loans were scheduled to come due amidst a period of relatively low-interest rates. The current projections diverge markedly as an estimated $2.75 trillion of loans are set to mature between this year and 2027. This accounts for nearly half of the $5.67 trillion in outstanding loans, according to data from Trepp.

Predominantly, the banking sector holds the largest share of commercial real estate loans, boasting a combined portfolio valued at roughly $2.86 trillion and will encounter maturing obligations of $1.44 trillion through 2027.Today, banks are under regulatory pressure and need to shore up their balance sheets and liquidity positions, causing significant lending restrictions to commercial real estate. This traditional lender disruption further opens the door for private credit.

With solid liquidity in place, we are optimistic about these future opportunities. While the lending landscape is complex, we are eager to capitalize on the inefficiencies in an elevated interest rate environment. In today's market, we can generate sizable returns without taking equity risk while simultaneously being in a discounted position of 25% to 40% of the current value of the underlying commercial real estate asset.

Although the journey ahead might be challenging, our commitment to sound lending practices, resilience and innovative thinking will play a pivotal role in our success. In the dynamic markets now, we see a myriad of untapped opportunities. We have the team to execute this investment strategy and are always looking ahead to anticipate and pivot to the next trade.  I appreciate your confidence in us. We all remain passionate about reaching our investment objectives together. As always, please don't hesitate to contact me with any questions, comments or concerns.

Market Report
5 min read

Q1 Insights: Impact of Interest Rate Hikes on Real Estate

The Fed's campaign of interest rate hikes to stave off inflation, coupled with slowing economic growth, has exposed cracks in the commercial real estate industry. As interest rates went up, required yields went up, putting upward pressure on cap rates – capitalization rates – and once that happened, the fallout was lower property values, which is still ongoing

As we dig into the current state of the commercial real estate industry, one cannot help but recall Charles Dickens' famous line, "It was the best of times, it was the worst of times." This quote, written to depict the stark contrasts of the French Revolution, finds a curious parallel in the dynamic landscape of our industry today. We find ourselves at the crossroads of tremendous opportunities - potentially historic - and unprecedented challenges, where the best and worst of times coexist within the commercial real estate ecosystem.

The Fed's campaign of interest rate hikes to stave off inflation, coupled with slowingeconomic growth, has exposed cracks in the commercial real estate industry. As interest rates went up, required yields went up, putting upward pressure on cap rates – capitalization rates – and once that happened, the fallout was lower propertyvalues, which is still ongoing.

Add the collapse of Silicon Valley Bank, the largest banking failure since 2008, the UBS rescue of Credit Suisse, and then First Republic's collapse has some worrying this will put further pressure on the commercial property industry as banks rein in their lending further. A fact noted in the Wall Street Journal's'Where is the U.S. Economy Headed? Follow the Money' article on May 31, "...Lending conditions for companies, consumers and real-estate developers tightened this spring to levels not seen since the height of the Covid pandemic...".

With roughly $1 trillion of commercial real estate debt maturing before the end of 2024, it may expose the industry and push some assets into default; office assets come to mind as the most troubled.

As dire as this seems, the commercial real estate market is not in the same precarious position it was during the Great Financial Crisis. Despite all the media coverage, I would also add that banks are in better shape than they were 15 years ago. Overall, commercial real estate fundamentals remain sound at the asset level. However, while the assets may be performing to its underwriting, the interest costs – double or triple today – weren't considered. Unfortunately, that is the reality for owners and investors of commercial real estate. The era of low-interest rates is over, as we anticipate higher borrowing costs for the foreseeable future.

The commercial real estate industry is navigating through this period of volatility, which is currently creating substantial investment opportunities for us. By identifying mispriced assets, capitalizing on distressed situations, providing capital at higher yields without last-dollar risk and staying attuned to emerging trends, we are well positioned for long-term success and to deliver value to our investors.We are also benefiting from our focus on the hospitality sector, which isn't seeing the level of property value erosion that the other lower cap rate sectors are experiencing. And, when we do make investments into other sectors, we are doing it on our credit side of the house. They are not lacking opportunities in this market. Peachtree continues to be a leading lender in hospitality and, more recently, in other commercial real estate sectors. The credit unit continues to generate equity-like returns at lower leverage points without taking the last-dollar risk. This ideal scenario benefits us, and we expect to see it through the year.

The other opportunities also being driven by liquidity issues – acquiring assets, buying mortgage notes – are emerging with more on the horizon. We have already made a few strategic investments in these areas, with more undoubtedly to come. In this rapidly changing market, our investment teams – debt and equity - are well-positioned to pivot to those opportunities.

I would be remiss not to mention our hotel development program, which continues to excel, with six hotels opening this year alone and a growing pipeline and ongoing groundbreakings. With growing room demand to record levels and limited new supply, we benefit from this persistent industry imbalance.

The hard work of our asset and property management teams should be noted too. They work diligently to protect your invested capital while striving to generate above-market returns in an evolving market characterized by significant challenges and uncertainties. Their expertise, attention to detail and relentless dedication contribute to the long-term success of our investments.

These current and anticipated opportunities will lead to another productive and potentially historic year for Peachtree.

Media Inquiries

Reach out to Peachtree Group for media and events inquiries, property management consultations, and more.

By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for  more information.