Peachtree Group originated a $59.0MM recapitalization of the 343-room dual-branded AC Hotel and Element San Antonio Riverwalk. The floating-rate note carries a 36-month term with two, 12-month extensions. The sponsors, Winston Hospitality and Concord Hospitality Enterprises, purchased former office towers—Riverview Towers—in December 2019 and spent two and a half years undergoing a multi-phase, adaptive reuse renovation to transform them into dual-branded hotels, which opened in 2022.
Located adjacent to San Antonio's famed Riverwalk, the #1 attraction in Texas, the hotels benefit from the city's strong tourism market, drawing over 39 million visitors annually, and its status as the third-fastest-growing city in the U.S., with a 3.8% population increase from 2020 to 2022. They remain the newest hotels in their competitive set.
The AC Hotel and Element are the first new Marriott-branded hotels in the Riverwalk Historic District since 2011, standing out in a downtown market where extended-stay offerings are predominantly Hilton-branded. As premium Marriott properties, they benefit from access to the Marriott Bonvoy loyalty program, the world's largest travel loyalty program, boasting over 200 million members and growing.
A wave of maturing debt has been a boon to business for Atlanta-based Peachtree Group. Peachtree Group, through its Peachtree Group Credit division, has deployed $556M in loans and another $526M to buy five hotels and develop another three projects. Recent deals include a $48M construction loan for a 215-room Autograph Collection hotel in Huntsville, Alabama, a $42.2M first mortgage loan to refinance the 133-room Motif on Music Row hotel in Nashville, Tennessee, and a $42M mortgage loan for the acquisition of Town Center at Cobb mall in Kennesaw.
The transaction market in the hotel industry has hit a stalemate over the past couple of years, with high borrowing costs sinking property values and regional and small banks struggling to originate debt. There is still opportunities to be had in this environment, though. Peachtree Group has deployed more than $1 billion in commercial real estate investments year to date, including $526 million to acquiring five hotels and three new development hotel projects.
Stonehill, a commercial real estate direct lender, ranked as the 8th largest U.S. commercial real estate hotel lender by the Mortgage Bankers Association ("MBA") 2022 loan origination rankings, a two-spot increase from the 2021 rankings. In 2022, Stonehill deployed $1.2 billion in real estate investment, with $813 million related to hotels.
Stonehill was also ranked as the 16th largest U.S. commercial real estate retail lender by MBA, having deployed $163 million in 2022.
"Our performance is a testament to our commitment to understanding our sponsors' business plans and accomplishing the transactions by having stable capital despite market turbulence,” said Mat Crosswy, Stonehill's president and managing principal.
Last year, Stonehill expanded its commercial lending business to originate and make investments across all real estate sectors by forming Stonehill CRE. This CRE group focuses on heavy transitional assets and sectors of the credit market that are traditionally undersupplied.
"Amid economic volatility and rising interest rates, traditional lenders have pulled back on real estate lending, creating a dislocation in the capital markets. At Stonehill, we have spent years building our capital formation, allowing us to originate loans and provide financing to real estate owners across all sectors looking to execute their business plans, even during periods of uncertainty," said Daniel Siegel, president, Stonehill CRE.
MBA's annual originations rankings report is a comprehensive set of listings of 149 commercial/multifamily mortgage originators, their 2022 volumes, and their different roles.
About Stonehill
Stonehill, a part of Peachtree Group, is a direct lender providing permanent loans, bridge loans, mezzanine loans, commercial property assessed clean energy (CPACE) financing and preferred equity investments secured primarily by hotel assets. Founded in 2013, Stonehill provides creative finance solutions for acquisitions, recapitalizations, refinancings and renovations and has completed over 510 transactions totaling over $5.4 billion. The principals of Stonehill have combined to originate, structure or purchase over $10.0 billion of debt.
