From Challenges to Opportunities: Navigating the Senior Living Housing Market with CPACE Financing
Senior Living Memory Care Center
Peachtree Group originated a Commercial Property Assessed Clean Energy (CPACE) loan for $8.3MM for the new construction of a 64-unitmemory care facility in Orlando, Florida. The loan amount represents 28% of the appraised value and 31% of the total development cost.
Senior living spaces are a growing market with sustained supply-demand trends restoring occupancy rates to their pre-pandemic levels, ultimately leading to positive revenue growth. Despite these positive trends in the overall market, securing financing for a facility that includes memory care or assisted living is often more difficult due to the required licensing. Because of an existing relationship with a senior lender, Peachtree Group was able to carve out the CPACE portion of the loan, which provides lower-cost financing for the sponsor. The CPACE loan funds went toward the building envelope, mechanical systems (HVAC), electrical and plumbing.
Strong Basis & Location
The Orlando area senior population is forecasted to grow beyond the national average, necessitating the need for more senior living, and this development has a strong basis of $129K/unit. The property is conveniently located near major highways, making it easily accessible for visiting family. It is also part of an affluent and growing area of Orlando called Dr. Phillips, known for its award-winning schools and waterfront homes. As the parents of these families age, the project offers an option for care close to their home.
Experienced Sponsor
Certus is a growing owner-operator of assisted living memory care communities, with eight communities in its portfolio. The company’s senior leadership team has over 40 years of experience in successful real estate ownership, property development, and commercial real estate, specializing in senior living housing. In addition, the principals have experience in retirement community management and working with memory care patients. Four of the eight communities in their portfolio have opened within the past three years, and the remaining are under development.
Certus efficiently uses the same development plans, budgets and business strategy for all developments in its portfolio.
Proximity to Demand Drivers
The property for this development is located within a 10-mile radius of three major hospitals (Orlando Health Center, Orlando Health Regional Medical Center and Orlando Health Horizon West). In addition to an affluent housing market, the Dr. Phillips suburb of Orlando has fine dining and shopping along the renowned "Restaurant Row.” It is also less than a 10-mile drive from Universal Studios and Disney World, offering attractions for visiting family.
Peachtree Group is a senior bridge and construction lender that can provide CPACE financing on projects currently under construction or completed within the last 36 months. The program is available for all commercial real estate asset classes.
Learn more about CPACE financing or contact Peachtree's CPACE team.
Click here for current loan rates.
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Avoid Political Noise When Investing: A Market Update with Larry Adam, Raymond James
In our recent market update call, we hear insights from Larry Adam the Chief Investment Officer of Raymond James, alongside Greg Friedman, Managing Principal & CEO of Peachtree Group and Daniel Savage, VP Equity Capital Markets of Peachtree Group. One of the standout moments from the discussion was an intriguing investment takeaway that highlights the importance of consistent investing over trying to time the market based on political cycles.
Investment Insights Through the Decades
Consider this: if you had invested $10,000 in the stock market starting in 1970 and only remained invested during Republican presidencies, your investment would have grown to approximately $133,000 by now. Conversely, if you had only stayed invested during Democratic presidencies, your portfolio would have soared to around $700,000.
Now, here’s where the numbers become even more compelling. If you had stayed fully invested in the market, regardless of which party was in power, that initial $10,000 would have appreciated to an impressive $1.6 million!
The Lesson: Stay the Course
Timing the market based on political affiliation has proven to be less effective than maintaining a consistent investment strategy. As Larry Adam pointed out, “It's more important to be in the market than trying to find the market. I think that's a critical lesson…”
The volatility that comes with political changes can tempt investors to pull back or make hasty decisions. However, history shows that those who remain patient and invested through all market conditions tend to reap the greatest rewards.
The key is to be in the market, not trying to outsmart it.
About Larry Adam
Larry Adam joined Raymond James in 2018 as Chief Investment Officer. With over thirty years of experience in the financial markets, Mr. Adam brings a wealth of knowledge and valuable insights on the markets and economy to advisors and clients. As CIO, Mr. Adam develops the firm’s CIO view, a cohesive and comprehensive macro outlook, using insights and perspectives from the firm’s strategists. Mr. Adam presents at numerous client events and is renowned for his ability to explain complex concepts to investors.
Mr. Adam provides advisors and clients with in-depth guidance regarding the markets, including weekly and monthly commentary and quarterly outlooks. In addition to serving as President of the Investment Strategy Committee, he also sits on the Global Wealth Solutions (GWS) Diversity & Inclusion Campus Recruitment Committee, the GWS Executive Council, and the Alternative and Structured Investments Product Approval Committee.
Prior to joining Raymond James, Mr. Adam held the dual roles of CIO of the Americas and Global Chief Investment Strategist for Deutsche Bank Private Wealth Management. He received a B.B.A. with a concentration in finance from Loyola University Maryland in 1991 and received a master’s degree in business with a concentration in finance from Loyola University Maryland in 1993. Mr. Adam is an adjunct professor at the Sellinger School of Business and Management at Loyola University, teaching classes in International Finance. He received the Chartered Financial Analyst designation in 1996, the Certified Investment Management® certification in 2001 and the Certified Financial Planner® designation in 2004. Mr. Adam is regularly featured on CNBC and Bloomberg and is frequently quoted in well-known publications such as the Wall Street Journal and Barron’s.
Bloomberg TV: Peachtree CEO on Challenges in CRE, Market Trends and Why Private Credit
Peachtree Group CEO Greg Friedman joined Bloomberg TVs Abigail Doolittle to discuss the challenges in commercial real estate, market trends and why private credit.
Click here to see the entire episode which begins around 43:48.
Peachtree Group Launches Restaurant Management Division
ATLANTA (SEPT 4, 2024) – Peachtree Group, a vertically integrated investment management firm, has launched a restaurant management division. Under the leadership of Daniel Puglisi, SVP of corporate operations for hospitality management, this division will focus on operating quick-service restaurants, starting with coffee shops.
This new venture underscores Peachtree Group's commitment to expanding its footprint in the hospitality industry, beginning with a high-profile partnership with AdventHealth and launching a Starbucks location in its AdventHealth Orlando hospital.
The U.S. Quick Service Restaurant (QSR) market was valued at approximately$320 billion in 2023, encompassing major chains like McDonald's and smaller regional players. Coffee shops, including big names like Starbucks, Caribou Coffee and Dunkin', make up 12-15% of this market, contributing tens of billions in annual revenue.
"Since our founding in 2007, we have consistently grown by identifying inefficient markets and capitalizing on them to achieve strong returns and build sustainable businesses," said Greg Friedman, Peachtree Group’s managing principal and CEO. "The expansion into restaurants from our existing hospitality management capabilities was a natural evolution. Our partnership with AdventHealth marks a significant milestone as we look to replicate this successful model across their network and other captive locations."
The Starbucks at AdventHealth Orlando is now open and is the first storeto be opened under this new division. It is strategically positioned within the hospital's flagship university campus, featuring a two-story glass storefronton a prominent corner. This initiative is part of a broader strategy to enhance patient satisfaction and provide convenient, high-quality service to hospital visitors and staff.
Peachtree Group is also in discussions with other coffee franchise offerings and aims to extend its reach to high profile or high demand markets with captive audiences. The goal is to establish a robust portfolio of high-profile quick-service coffee shop locations nationwide.
The new division will oversee all new and existing restaurant locations not within its own portfolio of hotels. This includes transitioning its downtown Orlando Starbucks location at its dual-branded Hilton Garden Inn andHome2 Suites by Hilton to the restaurant management division.
"Our commitment to excellence in service and operational efficiency sets us apart in the industry. By leveraging our extensive hospitality expertise and premium brand partnerships, we are able to deliver exceptional experiences to our customers and value to our landlord partners," Puglisi said.
This initiative follows a year-long development process, beginning with a lease agreement signed in August 2023 and construction commencing in February2024. Peachtree Group has toured several other AdventHealth campuses, laying the groundwork for future expansions.
Peachtree Group's strategic approach and customer service mindset have been key factors in securing this partnership. As other hospital systems observe the positive impact on AdventHealth's patient satisfaction scores and asset enhancement, Peachtree Group anticipates a growing demand for similar arrangements.
"We are excited about the potential to grow this venture rapidly, with an initial goal of reaching five stores as a beta test and ultimately aiming for 100 locations," Puglisi added. "Our focus is on hospitals, universities and other high-traffic, high-visibility locations where we can make the most significant impact."
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, the company manages billions in capital across acquisitions, development and lending, augmented by services designed to protect, support and grow its investments. For more information, visit www.peachtreegroup.com.
Contact:
Charles Talbert
678-823-7683
ctalbert@peachtreegroup.com