Statista estimates the value of the commercial real estate market will reach $24.67 trillion in 2023. According to the Deloitte Center for Financial Services 2024 industry outlook, half the industry expects the cost of capital and capital availability to worsen through next year. Couple that with the $1.5 trillion wall of debt maturing before the end of 2025 and it’s easy to understand the trepidation in the market today.
But we’ve been here before.
The credit team at Peachtree Group has completed hundreds of transactions worth north of $15 billion. In our collective careers, we have seen borrowers navigate unstable markets, such as what we are experiencing today, in a variety of different ways.
Here are five tips for borrowers trying to navigate today’s difficult market, and secure funding for their project.
It has been a borrower’s market for several years now, and this is not one of them. Do not forsake the term sheet in your hand – the Fed has raised interest rates 11 times since March of 2022. Spending too much time on turns of a term sheet might leave you losing any spread concessions to increases in the benchmark or, even worse – lenders deciding to pull terms altogether. If you have an offer from someone you trust, you might want to take it.
On existing projects, your current lender is most likely your best friend. A lender willing to give you an extension is gold in this market. Getting additional terms out of your current lender is likely the least costly option, even if it comes with fees and a rate increase – it likely is still significantly less costly than what the current market will give you. However, I hope that you have been a good borrower – up to date on deliverables, communicative about the status of your project, etc. – make no mistake, the bank is doing you a favor, don't give credit committee a reason to say no.
Being one of the largest CPACE originators in the country, Peachtree has seen a significant increase in pipeline looking to apply proceeds retroactively. Properties are eligible for CPACE up to 3 years after certificate of occupancy in approved municipalities and proceeds can generally be up to 35% of stabilized value. It’s a source of capital that has become more interesting to first mortgage lenders as the proceeds could be used to paydown your first mortgage and size a new interest reserve.
We pride ourselves on being lenders who want to be part of the solution when a deal has a budget bust or stabilization is taking longer than anticipated. However, I always encourage borrowers to size up their budget contingencies (i.e., 7% vs. 5%) or structure additional interest reserves. Yes, it will increase your initial capitalization, but your lender will pick up 60-70% of that cost in the loan funding. It may mean more work on the initial capital raise, but it's usually less costly than going back to your lender and/or equity mid-project to get additional capital.
Lenders have access to data and information. They ultimately will discover the truth; it might as well come from you. This includes prior credit aberrations or issues and accurate property performance information. We have capital specifically for lending on special situations – there are a lot of deal-level risks that can be mitigated, but lack of trust with sponsorship is not one of them.
In uncertain times, hope for the best but prepare for the worst. Peachtree is an experienced capital partner who understands commercial real estate's nuances. With funding options limited from traditional lenders, our team has the lending solutions, financial capacity, and expertise to close complex transactions in today's challenging capital market environment.
We are available to discuss your lending options that meet your business objectives. Visit us at www.peachtreegroup.com.
Daniel Siegel is president and principal of Peachtree's commercial real estate lending group.
Before joining Peachtree, he was with Ardent Companies as managing director and the head of high-yield investments leading the company’s debt investments. Prior to that, Daniel was vice president of acquisitions at Rialto Capital, overseeing the distressed loan acquisitions platform. During his tenure at Rialto, Daniel directly oversaw the acquisition of commercial real estate loans on domestic and international opportunities. Additionally, he developed the firm’s small balance loan acquisition platform and led the company’s first European acquisition.
Daniel has a bachelor’s degree in finance from Tulane University. Contact him at dsiegel@peachtreegroup.com.
Commercial Observer | Peachtree Group originated the three-year loan with two 12-month extension options for the developer's 123-key Aloft Cupertino, California. Loan will fund an reno of the 2013-built property situated two blocks from Apple's Infinite Loop Campus.
Atlanta Business Chronicle | Atlanta Based Peachtree Group provided at $42MM loan to finance Banyan Street Capital’s acquisition of Atlanta Financial Center, the high profile office complex in the heart of Buckhead. The lender announced that it originated a floating rate first mortgage loan with a three-year initial term and 1 year extension option.
Press Release
ATLANTA (July 23, 2025) -Peachtree Group ("Peachtree) originated a $42 million first mortgage loan to finance Banyan Street Capital's ("Banyan") acquisition and repositioning of the Atlanta Financial Center ("AFC"), a914,774-square-foot Class A office campus in Buckhead, Atlanta.
“This transaction highlights how private credit continues to fuel opportunities across the commercial real estate landscape,” said Daniel Siegel, president and principal CRE of Peachtree. “In today’s volatile environment of elevated interest rates and persistent inflation, private credit remains a critical source of capital.”
Much like during the height of the debt crisis, when private credit lenders stepped in to maintain liquidity and helped stave off a broader recession, today’s private credit market continues to step up to fill the void left by traditional lenders and provide certainty for sponsors pursuing thoughtful business strategies.
“We believe the office sector is at an inflection point, much like retail when we were financing mall acquisitions. Negative sentiment is masking real opportunities. The market is bifurcated, with most vacancy tied to a number of troubled assets, and when you adjust for those, the fundamentals tell a different story. While sentiment will take time to shift, we’re ready to back smart business plans in this space,” Siegel said.
Initially acquired in 2016 by a Sumitomo Corporation affiliate for $222.5 million, AFC faced tenant departures, softening fundamentals and shifting capital priorities. The property is situated atopGA-400, offering daily visibility to approximately 420,000 commuters, and comprises three interconnected towers spanning 13.05 acres, with structured parking for 2,335 vehicles.
Banyan plans to reposition AFC, starting with the lease-up of the North Tower, supported by capital expenditure reserves and funds for tenant improvements and leasing. The sponsor will also explore larger tenant opportunities and future redevelopment options.
“This transaction reflects a careful approach to how we de-risk, by structuring a basis reset in a top submarket with an experienced sponsor and a clear repositioning plan," Siegel said.
While the broader office market faces headwinds, Buckhead remains one of Atlanta's strongest submarkets, supported by its base of financial firms, direct MARTA access, and highway connectivity, as well as high-end retail and hospitality amenities. Limited new supply, declining sublease inventory and stable tenant demand position Buckhead and AFC for recovery and growth.
The floating-rate loan carries a 36-month initial term with a 12-month extension option and is backed by completion, interest and carry guarantees from Banyan.
This transaction highlights Peachtree's ability to deliver flexible capital solutions for transitional assets in premier locations at a meaningful basis reset. Comparable transactions in the market reflect a 98percent premium to Peachtree's loan basis, underscoring the strength of the collateral and business plan.
"Borrowers are seeking flexible capital solutions that can adapt to shifting market conditions, and that's exactly what we're delivering," said Jared Schlosser, head of originations and CPACE at Peachtree. "By offering certainty of execution, we're giving sponsors the runway they need to execute thoughtful business plans."
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
678-823-7683ctalbert@peachtreegroup.com
Commercial Observer | Shopoff Realty Investments has sealed a $52 million loan to refinance a newly built industrial project in suburban Phoenix, Commercial Observer has learned.
Peachtree Group originated the bridge loan for Shoproff’s planned 270-acre The Block at Elliot development at the intersection of East Elliot Road and South Sossaman Road in Mesa, Ariz.
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