Versatile Hotel Financing with both Senior & CPACE Origination

Property Type
Hotel
Investment Type
CPACE Lending
Brand
Hilton
Date of Investment
December 2023
Location
San Diego, CA
Keys
263
Units
Square Footage
CPACE Lending
CPACE
CPACE Lending
CPACE
CPACE Lending
20% CPACE
CPACE Lending
$22.6MM CPACE $50.4MM Senior

Home2 Suites by Hilton/Tru

Peachtree Group originated a $50.4MM first mortgage and a $22.4MM Commercial Property Assessed Clean Energy (CPACE) financing for the development of the dual-brand, 263-room Home2 Suites – Tru by Hilton Hotel located in San Diego, CA. This project highlights Peachtree Group’s competitive advantage by demonstrating its ability to fully execute both senior and CPACE loans. The firm’s expertise spans multiple loan types, and having highly skilled originators in each area reinforces Peachtree Group’s versatility and comprehensive financing capabilities.

Strong Basis & Location

The project is located in one of the largest cities in the U.S., attracting over 30MM visitors annually, including 16.5MM overnight visitors in 2022. That year, visitor spending hit a record high of $13.6B, driven by significant increases in leisure demand, resulting in longer stays and higher expenditures. As of July 2023, hotel demand remained robust, with the city achieving the fifth-highest RevPAR among the top 25 U.S. hotel markets

Experienced Sponsor & Management Company

The sponsor, based in San Diego, is a long-term investor and a vertically integrated real estate development and management company with investments in hospitality, retail, and multifamily sectors. The sponsor is also an experienced operator, successfully owning and managing four hotels within one block of the new development. They plan to leverage cost-saving measures through streamlined operations, which offer efficiencies by reducing personnel headcount and centralizing functions such as accounting and sales

Proximity to Demand Drivers

The hotel’s location is renowned for its exceptional year-round climate, over 70 miles of coastline, emerging healthcare and biotechnology hubs, world-class hotel and convention spaces, and a wide array of dining and entertainment options. This area is a dynamic and growing life science and technology hub, boasting the third-largest concentration of life science companies in the U.S. San Diego has historically demonstrated greater resilience compared to other major West Coast hospitality markets. It is one of the top convention destinations globally, with the waterfront San Diego Convention Center located within a mile of the development. Tourism highlights include nearby beaches, Balboa Park, the San Diego Zoo, Campus at Horton Plaza, SeaWorld and the Air and Space Museum. The Research and Development District (RADD) is an 8-acre campus comprising office, lab, and retail space with a primary focus on life sciences, biotech, and research. Besides biotech, there is significant employment growth in high-tech and education sectors. The area’s largest employers include the Naval Medical Center, Sempra Energy, Aecom, Union-Tribune, MiTek and iProspec.


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

House Views for 2025: Insights from Peachtree Group Senior Leaders

Peachtree Group executives share their insights into how the market is evolving and their strategies for overcoming challenges and capitalizing on the opportunities in this transformative period for the commercial real estate industry.
Header image for the insight blog "Houe views for 2025: Insights from Peachtree Group Senior Leaders"

   

This year marks a watershed moment for commercial real estate stakeholders. The erratic nature of the market demands a deep understanding of financial tools and the willingness to embrace alternative approaches. Success hinges on adaptability, innovation and a thorough grasp of market dynamics. While the headwinds are expected to persist, this environment offers unique opportunities for those who are prepared.

Peachtree Group CEO Greg Friedman wrote about those challenges in this blog post: 2025 CRE Market Forecast: Adapting to Disruption.

Below, the Peachtree Group team shares their insights into how the market is evolving and their strategies for overcoming challenges and capitalizing on the opportunities in this transformative period for the commercial real estate industry.

 

“2025 could mark the end of the 'kicking the can' era in commercial real estate, as outside pressures - banks, brands and partnerships - force transactions that can no longer be delayed. We've already seen the shift begin in late 2024, with assets that stalled during prior marketing cycles resurfacing under note sales and distress-driven deals. As equity takes a backseat and control shifts to outside parties, prepared investors will find unique opportunities in this evolving landscape.”   
Michael Bernath, SVP Acquisitions & Dispositions

 

"With debt maturities as the primary catalyst for capital events, the elevated interest rate environment and shifting property fundamentals are driving investors toward alternative strategies such as rescue capital, preferred equity and special situations. Borrower indecision and bank disagreements are fueling loan sales, while partnerships face stress from owner fatigue and capital calls, creating opportunities for M&A and large-scale equity trades. Against a backdrop of geopolitical risk, inflation and rising fixed costs, innovative and strategic approaches are essential for achieving growth."
Michael Ritz, EVP, Investments

 

“Banks, buoyed by strong reserves, are expected to sell commercial real estate loans as they manage risk exposure, address tighter regulatory requirements and free up capital. This trend will likely increase note transactions, offering investors access to discounted or even distressed assets. The market is also witnessing a significant rise in hybrid credit structures, blending debt and equity characteristics to provide flexible capital to borrowers while delivering attractive risk-adjusted returns to investors. The shifting environment in which traditional financing avenues are evolving presents opportunities for those equipped to navigate this chaotic market."
Jeremy Stoler, EVP, Debt Capital Markets

 

“In anticipation that public equities markets will generate lower annual returns over the next decade than in the decade prior, investors will increasingly seek alpha through alternative investments. Foreign capital partners in certain geographies and markets will continue to turn to U.S. commercial real estate to hedge against currency and geopolitical risks. Meanwhile, sponsor and LP fatigue will create a fertile environment for secondaries, special situations and structured finance deals, where fundamentally strong assets with challenged capital structures may be acquired or recapped at attractive valuations.”
Daniel Savage, VP Investments & Strategy, Equity Capital Markets

 

“The EB-5 program offers commercial real estate developers a distinctive advantage by providing lower-cost capital that enhances investment returns while creating jobs and driving economic growth. By including EB-5 financing into their capital stack, developers can better navigate stricter lending conditions and rising construction costs. This approach not only maximizes value but also positions the property for long-term success.”
Adam Greene, EVP, EB-5 Program

 

Lenders holding post-COVID distressed loans, recognizing they won't recover cash flow, are preparing to liquidate in 2025, creating opportunities for strategic buyers. However, a 'higher-for-longer' interest rate environment continues to stall the transaction market, as sellers resist trading at elevated cap rates, prolonging the bid-ask gap."
Jared Schlosser, EVP, Hotel Lending & Head of CPACE

 

“The commercial real estate development landscape continues to evolve, and the fundamentals of the hospitality industry enable it to standout as a strong and flexible sector ready to take advantage of new opportunities. With generally higher cap rates, supply growth well under the long-run average and strong investor appetite in areas supported by the federally backed Opportunity Zone program, the hotel industry is well-positioned to lead new projects, especially in infill locations. This growth shows how development will move forward, even as other real estate sectors face tougher challenges and economic struggles.”
Will Woodworth, VP, Investments

 

Press Release
Credit/CPACE
5 min read

Peachtree Group Surpasses $1.0 Billion in CPACE Financing

Peachtree Group has reached a significant milestone in Commercial Property Assessed Clean Energy (CPACE) financing, surpassing the $1.0 billion mark.
Title Image explaining Peachtree Group Surpasses $1 Billion in CPACE Financing

ATLANTA (Dec. 9, 2024) – Peachtree Group (“Peachtree”) has reached a significant milestone in Commercial Property Assessed Clean Energy (CPACE) financing, surpassing the $1.0 billion mark—a distinction shared by only a select few companies in the industry. In 2024 alone, Peachtree completed 22 CPACE transactions across the U.S., surpassing its previous record for CPACE originations.

"In 2019, we launched CPACE, and today we've surpassed our first billion—a testament to the exceptional team and the strength of Peachtree’s vision,” said Jared Schlosser, Peachtree’s Executive Vice President of Hotel Lending and Head of CPACE. “Our strong foundation has not only fueled Peachtree’s success in CPACE financing but also solidified its position as a leader in the broader commercial real estate lending market.”

In the most recent loan origination rankings by the Mortgage Bankers Association, Peachtree was ranked as the seventh-largest commercial real estate investor-driven lender in the U.S.

Quote Card that says "Our strong foundation has not only fueled Peachtree's success in CPACE financing but also solidified its position as a leader in the broader commercial real estate lending market" quoted by Jared Schlosser EVP of Hotel Lending and Head of CPACE

The firm’s $1.0 billion in CPACE financing is rooted in hospitality, which remains its largest segment comprising approximately 45% of its total. However, Peachtree has successfully expanded into other sectors, particularly residential communities (including multifamily, student housing and senior living), which now represent 22% of the portfolio or $220 million. Additionally, the firm has executed numerous CPACE transactions across industrial, mixed-use and office sectors, showcasing its versatility.

“In this challenging lending market, CPACE financing has emerged as a crucial source of liquidity for all commercial real estate sectors. This financing option is becoming increasingly essential as owners grapple with looming debt maturities and limited refinancing opportunities,” Schlosser said.

Commercial real estate remains in a turbulent period with trillions of dollars in debt maturing and refinancing becoming increasingly difficult due to tighter lending standards from traditional lenders. These challenges are reshaping the industry and forcing property owners to seek alternative financing solutions.

“CPACE has been a game-changer, offering long-term fixed-rate financing that lowers the cost of capital while enabling property owners to pursue energy-efficient upgrades with reduced financial strain,” Schlosser said. “Peachtree is proud to lead the way in expanding access to this innovative solution, helping owners across all commercial real estate sectors.”

In just over a decade, CPACE has reached a cumulative $7.2 billion in U.S. commercial real estate financings, according to PACE Nation, confirming the growing market adoption and acceptance of this financing tool.

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.

Press Release
DST
5 min read

Peachtree Group Expands Hospitality Portfolio with Launch of New DST Investment in Iconic St. Augustine

Peachtree Group has announced the acquisition of its sixth hotel property structured as a Delaware Statutory Trust (DST) with the 90-key Home2 Suites by Hilton St. Augustine I-95 in the greater Jacksonville, Fla., area.

Facade Rendering of St Augustines Home2Suites by Hilton

ATLANTA (Dec. 3,2024) - Peachtree Group (“Peachtree”), a leading commercial real estate investment firm with a multi-billion-dollar portfolio of equity and debt investments, has announced the acquisition of its sixth hotel property structured as a Delaware Statutory Trust (DST) with the 90-key Home2 Suites by Hilton St. Augustine I-95 in the greater Jacksonville, Fla., area. This latest DST offering is the third to close this year following the completion of the Residence Inn Tampa Wesley Chapel DST in November.

 

Peachtree’s DST hospitality acquisitions continue to present compelling opportunities for 1031 exchange investors seeking to reinvest proceeds from the sale of appreciated real estate while enjoying tax deferral benefits and maintaining a strong allocation within the thriving hotel sector.

 

The Home2 Suites by Hilton St. Augustine I-95 benefits from its strategic location off I-95 and its proximity to St. Augustine, one of Florida’s most popular tourist destinations. Known for its historic charm and vibrant economy, St. Augustine draws millions of visitors annually, creating year-round demand for hospitality services.

 

With its premier location along the I-95 corridor, strong population growth in the surrounding area and St. Augustine’s rich historical and cultural appeal, this property is a natural fit for our DST portfolio,” said Tim Witt, president of 1031 Exchange/DST Products at Peachtree. “This extended-stay hotel is well-positioned to meet the needs of leisure and business travelers alike, offering a blend of modern convenience and comfortable accommodations.”

 

Peachtree’s six DST acquisitions — spanning diverse, high-growth markets — demonstrate the company’s expertise in identifying strategic opportunities within the hospitality sector. These acquisitions, including the recently launched Home2Suites by Hilton St. Augustine I-95, represent approximately $175 million in debt-free real estate transactions.

 

“Our focus on recognized hotel brands, value-add opportunities and Peachtree’s experienced hospitality management team ensures long-term potential for investors,” Witt said.

 

Peachtree emphasizes its commitment to offering investors tailored solutions aligned with 1031 exchange principles, enabling the seamless transition of capital gains into passive investments in the hospitality sector.

This property features institutional-quality construction, spacious suites with extended-stay amenities and strong brand recognition. Located just minutes from St. Augustine’s historic downtown, the hotel offers convenient access to top attractions, including the Castillo de San Marcos, St. Augustine Premium Outlets and pristine beaches.

Recent nearby developments, including mixed-use projects, healthcare facilities and luxury apartments, further enhance the property’s appeal and position for sustained demand in the years ahead.

 With the launch of its sixth DST investment, Peachtree Group continues to lead in offering innovative real estate investment solutions. By capitalizing on positive secular trends in travel, inflation-resilient pricing models and the operational complexities of the hospitality sector, Peachtree delivers strong potential for long-term success and stability in its DST portfolio.

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

 

Securities offerings are distributed by Peachtree PC Investors, LLC, member: FINRA/SIPC. This announcement does not constitute an offer to buy securities.  DST Interests are illiquid, speculative and involve a high degree of risk. Prospective Investor should consult with his, her or its own tax advisor regarding an investment in DST Interests and the qualification of his, her or its transaction under Section 1031 for his, her or its specific circumstances.