Commercial Observer: Peachtree Funds $40.5M Portland Hotel Loan
Peachtree Group’s Keegan Bisch highlights strong tech-sector demand and limited hotel supply behind a $40.5 million bridge loan for two Hillsboro, Oregon, hotels.
How Hotel Financing Pressures Are Creating Investment Opportunities
2027 Hotel Industry Outlook: What the Latest Data Reveals
The U.S. hotel industry is heading into 2027 following a stronger-than-expected year for travel demand and room revenue. While growth may moderate as the industry faces difficult year-over-year comparisons, limited new construction and continued consumer spending could support hotel performance.
On a recent episode of Peachtree Point of View, Greg Friedman, Managing Principal and CEO of Peachtree Group, spoke with Jan Freitag, National Director of Hospitality Analytics at CoStar Group, about the industry's 2026 performance, the outlook for 2027 and the trends shaping hotel demand.
Why Did Hotel Performance Exceed Expectations in 2026?
The hotel industry entered 2026 facing uncertainty around consumer spending, geopolitical developments and international travel.
Yet demand proved more resilient than many anticipated.
"The year, in short, has been much better than expected," Freitag said, noting that CoStar had revised its 2026 forecast three times as hotel performance continued to improve.
According to data shared during the episode, year-to-date revenue per available room (RevPAR) increased approximately 5.6%, supported by 3.8% room rate growth and a 1.8% occupancy gain.
RevPAR is a key measure of hotel performance that reflects both room pricing and occupancy.
Several factors contributed to the stronger results, including a rebound in group travel, continued leisure spending and demand associated with the FIFA World Cup.
September was particularly strong, with RevPAR increasing 11%.
Freitag also noted that U.S. hotel room demand was expected to surpass its previous 2019 record in 2026, establishing a new high for the number of rooms sold.
What Is the Hotel RevPAR Forecast for 2027?
Although 2026 has exceeded expectations, the outlook for 2027 is more complicated.
Freitag suggested approximately 2.5% RevPAR growth for 2027, but cautioned that the annual figure could be misleading because of unusually difficult comparisons in June and July.
Those months benefited from World Cup-related demand and pricing in 2026, creating a higher benchmark for the following year.
Freitag described the outlook as a "10 plus 2" scenario, with 10 relatively normal months and two months facing difficult comparisons.
Without another World Cup, June and July could report weaker year-over-year growth even if underlying travel demand remains healthy.
For hotel owners and investors, understanding these calendar effects will be important when evaluating 2027 performance.
How Are Luxury and Select-Service Hotels Performing?
Hotel performance continues to vary significantly across segments.
Luxury properties have experienced particularly strong pricing power. Freitag reported year-to-date luxury room rate growth of approximately 7.1%, compared with 3.8% nationally.
More moderately priced hotels have experienced slower increases, with upper-midscale properties recording approximately 2.7% room rate growth and midscale hotels increasing 1.7%.
Those differences matter as operating expenses continue to rise.
"But our top line isn't growing as quickly as our costs are growing," Freitag explained, pointing to higher labor, insurance and energy expenses as factors putting pressure on hotel profitability.
Even luxury hotels, which have benefited from stronger room rates, face substantial operating costs associated with elevated guest expectations.
For hotel owners, maintaining profitability will depend on balancing revenue growth with expense management.
Why Is New Hotel Construction Remaining Limited?
One of the more significant trends shaping the industry's long-term outlook is the relatively limited amount of new hotel construction.
Freitag cited approximately 145,000 U.S. hotel rooms under construction, compared with roughly 220,000 in 2019.
Higher interest rates, construction costs and development financing challenges have constrained the hotel pipeline.
The impact varies by market. Some cities continue to experience meaningful development activity, while others have very little new supply planned.
For existing hotels, limited new competition could support occupancy and room rate performance over time, particularly in markets where travel demand continues to grow.
Friedman also emphasized the potential long-term benefits of constrained construction, noting that the lack of new competitive supply could "really pay dividends, down the road."
What Are the Biggest Challenges Facing Hotels in 2027?
Despite encouraging demand trends, several challenges remain.
Rising labor costs, insurance premiums and energy expenses continue to pressure hotel operating margins. International travel patterns and broader economic uncertainty may also affect performance across markets.
Freitag highlighted the potential impact of insurance costs, particularly for coastal hotels, as well as local tax policies and labor availability.
These factors mean that stronger room revenue does not necessarily translate into stronger profitability.
The outlook will also differ by hotel segment and geography, making market-specific analysis important.
Frequently Asked Questions
What is the hotel RevPAR forecast for 2027?
During the podcast, Jan Freitag discussed a preliminary outlook of approximately 2.5% RevPAR growth for 2027, noting that World Cup-related comparisons could affect June and July.
Why did hotel demand improve in 2026?
A rebound in group travel, continued leisure spending and demand associated with the FIFA World Cup contributed to stronger-than-expected hotel performance.
Are luxury hotels outperforming select-service hotels?
Luxury hotels have experienced stronger room rate growth than several lower-priced segments. However, operating expenses and profitability vary across properties.
Why is new hotel construction limited?
Higher interest rates, construction costs and financing challenges have constrained hotel development in many markets.
Will hotel demand continue growing in 2027?
The outlook discussed in the episode suggests continued RevPAR growth, although performance will vary by market and could be affected by difficult year-over-year comparisons.
Listen to Peachtree Point of View
Greg Friedman and CoStar's Jan Freitag discuss the trends shaping hotel demand, the 2027 outlook and what the latest industry data means for hotel owners and investors.
Listen to the full episode for their perspectives on the next phase of the lodging industry.
2026 YTD: $2.2B Private Credit, $524M Government-Enabled Financing
Lodging Magazine- Peachtree Group announced that it has completed approximately $2.2 billion in private credit activity year-to-date in 2026, including approximately $524 million in government-enabled financing through Small Business Administration (“SBA”) 7(a) and Commercial Property Assessed Clean Energy (“C-PACE”) transactions.
Peachtree’s government-enabled financing capabilities include SBA 7(a) loans originated through First Western SBLC, C-PACE financing enabled through applicable state and local programs, and USDA B&I-guaranteed financing for eligible rural businesses and real estate projects.
Statements From Leadership
“Borrowers are navigating a market in which the right capital is not always available through a single conventional lending channel,” said Greg Friedman, managing principal and chief executive officer of Peachtree Group. “Our objective is to bring the appropriate tools to each transaction, whether institutional private credit, SBA financing, C-PACE, USDA B&I or a combination of those solutions, so capital can be structured around the opportunity.”
“Each program addresses a distinct capital need, but the value of our platform is the ability to consider them together,” said Jared Schlosser, head of originations and C-PACE at Peachtree Group. “We have already demonstrated that by layering C-PACE with USDA B&I financing, allowing us to address different needs within the same transaction. That flexibility gives us more ways to structure capital around the asset, the borrower and the business plan.”
“There is a significant part of the hotel market where owners need financing that does not fit neatly into a conventional lending box,” said Brent LeBlanc, executive vice president of business development at Peachtree Group. “Having multiple financing capabilities allows us to serve borrowers at different stages, from entrepreneurs acquiring their first hotel to experienced owners expanding their portfolios and institutional sponsors executing much larger transactions.”
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Opportunity Zones 2.0: What Investors Need to Know About 2027 Changes
Executive Summary
Opportunity Zones are entering their second phase. Starting in 2027, the program becomes permanent, capital gains get a rolling five-year deferral instead of a fixed deadline, and rural investments qualify for a larger basis step-up. Zones will also be redesignated every 10 years going forward. These changes make Opportunity Zones easier to fold into long-term investment planning, but they don't change the importance of underwriting the investment itself.
Opportunity Zones 1.0 vs. 2.0
Opportunity Zones will look materially different beginning in 2027. The key changes are summarized below.
The first new round of Opportunity Zone designations takes effect January 1, 2027, beginning a recurring 10-year redesignation cycle. For investors evaluating Opportunity Zones ahead of 2027, five questions stand out.
How Does Tax Deferral Change Under OZ 2.0?
OZ 2.0 replaces the program-wide 2026 recognition deadline with a five-year deferral period for qualifying investments made beginning in 2027. Deferred gains are generally recognized five years after the investment, unless an earlier inclusion event occurs.
Under OZ 1.0, deferred gains generally had to be recognized by December 31, 2026, regardless of when the investment was made, making the benefit progressively less valuable as the deadline approached.
Under OZ 2.0, each qualifying investment effectively receives its own five-year clock. Will Woodworth, senior vice president of investments at Peachtree Group, expects the change to allow better tax planning and support “more consistent cash flows into the space.”
What Basis Step-Up Do Investors Receive Under OZ 2.0?
Investors who hold a qualifying OZ 2.0 investment for at least five years receive a 10% basis step-up, while investments in a Qualified Rural Opportunity Fund (QROF) receive a 30% step-up after five years.
Under OZ 1.0, investors could receive a 10% increase after five years and another 5% after seven years, although the program’s fixed timeline limited those benefits for later investments.
OZ 2.0 also reduces the substantial-improvement threshold for property located entirely within qualifying rural Opportunity Zones from 100% to 50%. These incentives could make some rural projects more viable, but investors still need to independently underwrite demand, liquidity, financing and exit risk.
Will Opportunity Zones Be Permanent Under OZ 2.0?
Yes. OZ 2.0 makes Opportunity Zones a permanent part of the tax code, with qualifying areas refreshed every 10 years.
Under OZ 1.0, investors faced an eventual program expiration and a fixed 2026 recognition date. Permanence allows investors, developers and capital allocators to evaluate Opportunity Zones as a long-term investment framework rather than an incentive approaching expiration.
As Woodworth put it, permanence makes Opportunity Zones an actionable strategy “not just right now, but for decades into the future.”
Will the Opportunity Zone Map Change in 2027?
Yes. Under OZ 2.0, Opportunity Zones will be redesignated every 10 years, with the first new round taking effect in 2027. That differs from OZ 1.0, where the original map was essentially static.
Eligibility also becomes more targeted, with the qualifying median-family-income threshold declining from 80% to 70% and the contiguous-tract provision eliminated.
As a result, markets that qualified under OZ 1.0 may not qualify under OZ 2.0, while new eligible areas will emerge.
Does OZ 2.0 Change the 10-Year Holding Period?
No. Investors generally still need to hold a qualifying Opportunity Zone investment for at least 10 years to access the program’s principal long-term tax benefit.
That remains an important consideration for real estate investors because a decade can span multiple property and credit cycles. Financing, valuations, supply and demand, and liquidity may look very different at exit than at acquisition.
The improved tax framework therefore does not change the importance of investment fundamentals, including basis, leverage, refinancing assumptions and sponsor execution.
OZ 2.0 also introduces a new 30-year rule worth noting. Under OZ 1.0, an investor only received the step-up to fair market value by selling the investment after the 10-year mark. Under OZ 2.0, that step-up to fair market value happens automatically at the 30-year point, regardless of whether the investor has sold.
What Should Investors Consider Before Investing in OZ 2.0?
Investors should first ask whether the underlying investment is attractive without the Opportunity Zone tax benefits.
The 2027 relaunch makes Opportunity Zones easier to evaluate as part of ongoing capital allocation rather than as a deadline-driven tax strategy. But the fundamental question remains:
Would this be an attractive investment without the tax benefit?
If the answer is no, a better Opportunity Zone structure may not change it. If the real estate, basis and capital structure are compelling, however, OZ 2.0 provides a more predictable framework for evaluating the after-tax return across multiple investment and real estate cycles.
Watch Will Woodworth explain the key changes coming with Opportunity Zones 2.0 and what investors should know:
This article is for informational purposes only and does not constitute tax, legal or investment advice.
Peachtree Group Earns Fourth Consecutive Inc. 5000 Recognition
Peachtree Group, a vertically integrated private investment firm active in commercial real estate, private credit and hospitality, today announced it has been named to the 2026 Inc. 5000, marking the firm’s fourth consecutive year on the magazine’s annual ranking of the fastest-growing private companies in the United States. Peachtree ranked 3,831 on this year’s list, with three-year revenue growth of approximately 67%.
Sustaining that pace is rare. Research from Stanford Graduate School of Business and IESE Business School found that only about 30% of companies on high-growth rankings return the following year, implying that roughly 3% would be expected to appear four successive years.
For Peachtree, the growth behind the ranking has also meant a larger team and a wider set of career paths. The firm has grown to over 3,700 employees across its investment, lending, development and hospitality businesses, with approximately 10% of open roles filled internally over the past year.
“We’re grateful for the recognition, but what I’m most proud of is the ecosystem behind it,” said Greg Friedman, managing principal and CEO of Peachtree. “We’ve built a place where someone can start in one division and build an entire career here, moving from real estate into credit, from underwriting into hotel operations, from analyst to principal, without ever having to leave. Growth on a list is a byproduct. Advancement in people’s careers is the point, and it’s the reason we’ve been able to maintain our expansion through different market environments.”
The recognition follows another milestone for the firm. Earlier this year, Peachtree was named to the inaugural PERE Credit 100, ranking among the world’s leading commercial real estate private credit managers. The annual ranking measures firms based on institutional capital raised for private real estate credit strategies over the previous five years.
“Together, these recognitions tell a consistent story,” Friedman added. “The Inc. 5000 acknowledges our ability to scale a high-growth business over time, and the PERE Credit 100 reflects the institutional platform we’ve built in commercial real estate credit. Both recognitions reveal the same foundation, a team that has earned the confidence of our investors and our partners.”
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