Peachtree Group Exceeds $1.0 Billion in Commercial Real Estate Originations

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ATLANTA (Oct. 14, 2024) – Peachtree Group ("Peachtree") announced that its credit team has surpassed $1 billion in loan originations year-to-date, marking a major milestone and setting a new benchmark for the firm's performance this early in the year. The firm anticipates that its credit team will surpass $1.75 billion in loan originations in 2024.

“While the Federal Reserve has lowered rates to provide some relief to the overall economy, the commercial real estate sector will continue to face significant headwinds over the next few years,” said Jared Schlosser, executive vice president of hotel lending and head of CPACE for Peachtree.

Quote Card that says "While the federal reserve has lowered rates to provide some relief to the overall economy, the commercial real estate sector will continue to face significant headwinds over the next few years" by Jared Schlosser, EVP of Hotel Lending and Head of CPACE at Peachtree Group

The wave of debt maturities in the trillions of dollars positions private credit lenders like Peachtree to step in and close the funding gap left by traditional capital sources.

“With conventional lenders still on the sidelines, we have seen a significant shift in capital markets with private credit lenders supporting the industry as it faces a sharp rise in debt maturities potentially approaching $1.5 trillion through 2025,” Schlosser said.

Peachtree is ranked as the seventh-largest U.S. commercial real estate investor-driven lender by the Mortgage Bankers Association in its latest loan origination rankings.

As a direct lender in the commercial real estate space, Peachtree offers a wide range of financing solutions, including permanent loans, bridge loans, mezzanine loans, CPACE (Commercial Property Assessed Clean Energy) financing and preferred equity investments across all commercial real estate sectors.

Hotels represented the largest sector and surpassed $639 million in credit transactions year-to-date, marking a 176% increase compared to the same period last year. Multifamily originations are the next most significant sector, with the two asset classes accounting for 80% of all credit transactions.

Notable credit transactions closed this year:

·      $47.0 million first mortgage loan for a multifamily property in Bradenton, Fla.  

·      $41.9 million first mortgage loan for a Kimpton Sylvan hotel in Atlanta, Ga.  

·      $40.0 million CPACE financing for an AC hotel in San Diego, Calif.

·      $38.5 million first mortgage loan for a multifamily property in Miami, Fla.

·      $26.4 million first mortgage loan for a Hampton Inn in Columbus, Ohio

“Peachtree has built a strong financial foundation over the years, giving it the stability to support commercial real estate owners in securing the funding needed for acquisitions, recapitalizations and development projects,” Schlosser 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, 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.

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Navigating Hotel Financing: Expert Insights on Adapting to Rising Interest Rates and Inflation

Jared Schlosser, EVP for hotel lending at Peachtree Group discusses the rapidly shifting economic environment and how hotel developers and lenders are adapting their strategies to secure successful outcomes.

In a rapidly shifting economic environment, hotel developers and lenders are adapting their strategies to secure successful outcomes for hotel projects. We sat down with Jared Schlosser, EVP of Hotel Lending and Head of CPACE at Peachtree Group to discuss how rising interest rates and inflationary pressures are influencing lending criteria and financial planning. Hear more insights from Jared during his panel Active Lending at Lodging Conference.

 

Q: Given the rising interest rates and inflationary pressures, how are lenders adjusting their underwriting criteria for hotels?

Jared Schlosser: Right now, it's all about cash flow. It’s hard to underwrite any sort of pro forma growth unless there’s a real story behind it. Lenders are focused on the cash flow, and if you can achieve a13% debt yield or higher, you qualify for generally permanent debt, CMBS, life company, or even bank takeouts. If you don’t meet that threshold, then you typically fall into the private credit space, which is where Peachtree Group comes in.

Q: What are the current trends in loan terms, such as loan-to-value (LTV) ratios or interest rates?

JS: It’s been quite varied, depending on what each lender's risk threshold is. The biggest trend I’m seeing is uncertainty around how long rates will stay elevated. Because of that, borrowers are seeking flexibility. They’re willing to pay a premium for loans with shorter yield maintenance or reduced prepayment penalties. Many are hesitant to lock into long-term fixed-rate debt like they used to.

We provide both fixed-rate and floating-rate loans, but even with fixed-rate products, borrowers are trying to secure as much flexibility as possible. We’re still getting to 70% loan-to-cost (LTC) or LTV, sometimes pushing up to 75% or scaling back, depending on our underwriting. In contrast, the banking market is closer to 50-55% on average, which highlights the difference between our space and traditional banks.

Q: How should developers adapt their financial strategies in this market?

JS: I always say in a volatile market, get ahead of it. Be proactive—get ahead of your maturity dates and start conversations early, whether it’s with us or other competitors in the space. Early engagement is key right now because the future is so uncertain.

With upcoming elections, the volatility surrounding Federal Reserve policy, and questions about whether rates will be cut or stay elevated longer than expected, liquidity is fluctuating. The sooner borrowers are out in the market looking for refinances or construction financing, and the more well-prepared their packages are, the better their chances of securing favorable terms.

Peachtree Group is a direct balance sheet lender focused on funding first mortgage bridge loans, mezzanine loans, preferred equity investments, and commercial property assessed clean energy (CPACE) financing, lending to all commercial real estate asset classes with a specialty in hotel financing. The Peachtree Group team has executed more than 297 transactions, originating more than $4.5 billion for projects seeking capital to complete acquisitions, recapitalizations, refinancing and renovations.

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Por qué los prestamistas exigen cartas de garantía para la financiación de hoteles de marca

Invertir en un hotel de franquicia puede ser una buena manera de diversificar su cartera y lograr retornos sólidos durante un período prolongado. Las cartas de garantía están diseñadas para proporcionar un marco legal para que los prestamistas y franquiciadores manejen situaciones en las que el comprador del hotel no paga el préstamo. Estos son algunos datos que todo inversor debe conocer sobre las cartas de garantía.

Invertir en un hotel de franquicia puede ser una buena manera de diversificar su cartera y lograr retornos sólidos durante un período prolongado. Encontrar las opciones de financiación hotelera adecuadas puede hacer que esta adquisición sea aún más rentable. Las cartas de garantía están diseñadas para proporcionar un marco legal para que los prestamistas y franquiciadores gestionen situaciones en las que el comprador del hotel no paga el préstamo. Estos son algunos datos que todo inversor debe conocer cartas de consuelo.

¿Qué son las cartas de consuelo?

Las cartas de garantía son documentos que permiten a los prestamistas: asumir los derechos de franquicia si el franquiciado original no paga el préstamo. Estas cartas incluyen disposiciones que garantizan que los prestamistas puedan seguir operando el hotel en caso de incumplimiento o ejecución hipotecaria de los préstamos hoteleros de la franquicia.

Beneficios de las cartas de consuelo

Las cartas de garantía ofrecen varios beneficios para todas las partes involucradas en la transacción, incluidos los siguientes:

  • Es más probable que los prestatarios encuentren los acuerdos de préstamo hotelero más atractivos si los prestamistas tienen una mayor certeza de que podrán recuperar su inversión incluso si el prestatario no cumple con sus obligaciones. Esto puede mejorar las condiciones de estos préstamos y facilitar la obtención del financiamiento necesario para adquirir propiedades de franquicia.
  • Los prestamistas pueden garantizar sus préstamos de manera más eficaz al garantizar la capacidad de mantener la rentabilidad de las propiedades que financian.
  • Las compañías de franquicias pueden proteger su marca al continuar con sus operaciones y mantener una presencia incluso cuando los franquiciados no cumplen con sus obligaciones financieras y no pagan sus préstamos hoteleros.

Muchos prestamistas exigen cartas de garantía antes de finalizar los préstamos para propiedades hoteleras franquiciadas.

Creado por la empresa de franquicias

En la mayoría de los casos, la carta de garantía es redactada por la compañía franquiciadora como parte del proceso de franquicia. Estos documentos legales pueden seguir una plantilla estandarizada o pueden personalizarse para adaptarse a las necesidades del prestatario y del prestamista. El contenido de la carta puede incluir algunas o todas las siguientes disposiciones:

  • Disposición que garantiza la capacidad del prestamista de designar a un administrador judicial para que opere el hotel durante un breve período de tiempo durante el proceso de ejecución hipotecaria.
  • Cláusula que permite al prestamista subsanar cualquier incumplimiento del contrato de franquicia antes de que se rescinda.
  • Una disposición que permite la reventa de la propiedad y la transferencia del contrato de franquicia a un tercero si el hotel entra en mora.

Estas disposiciones están diseñadas para proteger al prestamista si el préstamo de financiación hotelera entra en mora.

Acerca de Peachtree Group

Grupo Peachtree es un prestamista directo especializado en préstamos hoteleros. Nuestros originadores trabajan con inversores de todo EE. UU. para ofrecer los acuerdos de financiación hotelera más prácticos para sus necesidades específicas. Póngase en contacto con nosotros hoy mismo para analizar sus necesidades financieras con uno de nuestros expertos originadores de préstamos. Trabajamos con usted para ofrecerle las mejores opciones para sus necesidades de financiación hotelera.

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Reviving Malls: Shifting Perspectives on Retail's Potential

Is mall still a four letter word? Retail, including malls is experiencing strong leasing momentum, but to be successful, retail investors need to consider these tips.

In today’s highly competitive and constantly evolving real estate market, sponsors of retail commercial properties need a reliable financial partner to help them navigate the complexities of this space. There is a perception that capital is non-existent for this sector, but that couldn’t be further from the truth. Peachtree Group Credit has emerged as an industry leader – ranking as the 16thlargest U.S. commercial real estate retail lender ranking as the 16th largest U.S. commercial real estate retail lender – providing creative financing solutions to help clients realize their vision for maximizing return on investment.

The fact is retail, including malls, is experiencing strong leasing momentum with increased foot traffic allowing sponsors to stabilize cash flow levels, which took a hit during the beginning of the COVID-19 pandemic. Brick-and-mortar retail locations are a necessary and growing component of a retailer’s multi-channel strategy. While traditional retail struggled before COVID, the pandemic has brought greater appreciation for in-store experiences for certain shopping items. This trend bodes well for retail as an investment.

To remain competitive, retail investors must accelerate their plans and expand their thinking to find ways to keep their retail locations relevant in a changing landscape.

Retail investors are looking at this sector with compelling strategies, including reimagining portions of the property to bring in new tenants, densifying the property by spinning off excess parking into pad sites or value-add components with a plan for re-leasing and some potential redevelopment opportunities.

Peachtree provides needed liquidity for maturing loans, new acquisitions and construction projects.

Some of the recent coast-to-coast mall transactions completed, include:

  • Bellis Fair Mall – Originating a$24.0 million first mortgage loan for the 774,264 square-foot shopping mall in Bellingham, Washington.
  • Cumberland Mall – Originating a$28.8 million first mortgage loan for the 953,313 square-foot shopping mall in Vineland, New Jersey.
  • Greenwood Mall – Originating a$42.3 million first mortgage loan for the 970,523 square-foot shopping mall in Bowling Green, Kentucky.
  • The Mall at Robinson – Originating a$25.5 million first mortgage loan for the 874,000 square-foot shopping mall in Pittsburgh, Pennsylvania.
  • TownCenter at Cobb – Originating a $42.0million first mortgage for a 1,200,000 square-foot shopping mall in Kennesaw, GA
  • Fairlane Town Center – Originating a $28.0million first mortgage for a 1,450,000 square foot shopping mall in Dearborn, MI

Peachtree actively collaborates with sponsors from the initial concept stage until closing, offering expedited financing explicitly tailored for their business, allowing all parties to achieve a best-in-class financial outcome. Throughout the process, Peachtree keeps up regular touchpoints, ensuring the transactions go smoothly. This further demonstrates Stonehill’s commitment to supporting sponsor capital strategies with execution certainty amid a highly unpredictable funding landscape, increasingly a critical variable impacting retail real estate acquisition competition outcomes.

Having access to an experienced lender can provide valuable expertise and guidance to help you with your investment. With specific retail knowledge, Peachtree can provide insights into effective strategies for success. At Peachtree, we have the expertise to guide you through your options.

 

Greg Koenig is a senior vice president at Peachtree Group Credit. Before joining Peachtree, he was an executive director at A large private equity firm, focusing on debt originations in all asset classes. Prior to that, Greg was a senior vice president at Newport RE, a German-based real estate investment company, focusing on acquisitions and asset management for its U.S. portfolio. Previously, he was a vice president at Rialto Capital, where he helped underwrite and asset-manage loan portfolios. Before joining Rialto, Greg worked at TriMont Real Estate Advisors facilitating loan workouts and maximizing returns on distressed assets. Greg holds a bachelor’s degree from the University of Connecticut, where he majored in Real Estate and UrbanEconomics.

Contact Greg at gkoenig@peachtreegroup.com or 1-860-833-2285.