Harnessing Relationships with Senior Lenders to Secure CPACE Financing

Property Type
Senior Living Facility
Investment Type
Credit/Lending
Brand
Date of Investment
Location
Washington
Keys
Units
148 Unit
Square Footage
Credit/Lending
CPACE
Credit/Lending
CPACE
Credit/Lending
50%
Credit/Lending
$32.9MM

Senior Living Facility

Because Commercial Property Assessed Clean Energy (CPACE) loans are billed as an assessment that takes priority over all first liens, a CPACE loan requires senior lenders to consent to it. Although senior lenders are becoming more familiar with CPACE and are therefore more willing to consent to the loan, many are still unaware of it. Educating a senior lender on the benefits of CPACE financing can be a nuanced process. Peachtree Group has longstanding relationships with most senior lenders and understands their concerns, as well as how to structure a deal with the highest chance of garnering consent.

Peachtree Group leveraged its vast network of senior lenders to secure a CPACE loan for the development of a five-story, 148-unit senior living facility with 6,893 square feet of leasable retail space located in Ridgefield, WA. Amenities for the facility include housekeeping, a lounge and fitness center, a golf simulator, a pool, billiards, and pickleball, as well as shuttle transport services.

The construction budget includes a total of $27.1MM in CPACE-eligible line items. The CPACE loan will fund $26.18MM of net CPACE proceeds, which will go toward the building envelope, HVAC, lighting, plumbing, covered processes, qualifying soft costs, and seismic improvements. The remainder is held as interest reserve for any overages.

Strong Basis & Location

The property sits within a large mixed-use master plan community that includes both commercial and residential uses. It is adjacent to a large, protected wetland and green space, offering stunning views. The location is a 15-minute drive from downtown Vancouver, WA, and a 30-minute drive from Portland, OR. Due to its rapid growth, Ridgefield has experienced significant real estate development, including new housing developments, apartments, and condominiums. The real estate market is generally characterized by relatively high demand, driven by the area’s attractiveness to families and professionals, as well as its proximity to Portland.

Market outlook & Demand for Senior Living

Census data reveals that the number of Americans aged 65 and older reached a staggering 55.8MM in 2020, accounting for 16.8% of the nation’s population. This surge in the aging population is the primary driver behind the increased demand for senior housing. Anticipation among area residents has been high since the initial announcement in July 2022.

Proximity to Demand Drivers

To meet the growing demand, it is estimated that more than 800K additional units of senior housing will need to be added in the U.S. by 2030. Ridgefield has been one of the fastest-growing cities in Washington. Its population is diverse, including a significant number of families and young professionals. Overall, the location benefits from nearby attractions such as entertainment venues, retail stores, and wholesale markets, which cater to the preferences and convenience of the senior population.


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.

Peachtree news and insights.

Insight
General
5 min read

Avoid Political Noise When Investing: A Market Update with Larry Adam, Raymond James

Peachtree Group hosted Larry Adam the Chief Investment Officer of Raymond James for a recent Market Call. Larry talked about the importance of staying invested throughout political cycles like the upcoming US Presidential election.

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.
Slide Provided by Raymond James

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.

Press Release
General
5 min read

Peachtree Group Launches Restaurant Management Division

Peachtree announces Partnership with AdventHealth with First Licensed Starbucks Location in Orlando.

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.

From left to right: Nikki Garcia (Food and Beverage Manager, Peachtree Group), Ashleigh De Otis (Starbucks Store Manager, Peachtree Group),Rob Deininger (CEO AdventHealth Orlando) and Dan Puglisi (SVP, Peachtree Group)

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