During the California Gold Rush, thousands rushed west in search of fortune. Few struck it rich. The real winners were those who sold the picks, shovels and other tools needed to sustain the miners’ efforts. They thrived not by chasing the frenzy, but by positioning themselves with strategy and discipline.
Today’s commercial real estate market presents a similar dynamic. The market continues to experience one of its most significant resets in more than a decade. While many assets remain operationally strong, capital structures are under pressure. Higher interest rates, constrained debt markets and a steady wave of loan maturities have created a liquidity gap that traditional lenders are unwilling or unable to fill. Those positioned to provide the tools, in this case, creative solutions, stand to benefit the most.
Private credit continues to be a critical source of capital in today’s market, and our credit team’s activity reflects that demand. As of mid-August, we’ve originated more than $1.3 billion in loans and expect that momentum to continue. Notable transactions include a $53 million bridge loan for a 270-acre mixed-use development in Mesa, Arizona; a $42 million bridge loan supporting the acquisition of the Atlanta Financial Center; $36 million in construction financing for a 179-unit Class A multifamily development in Oregon; and $67.5 million of bridge financing for the recapitalization of the newly opened 187-room Printing House – Tapestry Collection by Hilton property in Nashville. We are well on our way to another record year in originations.
While our private credit platform is meeting the immediate demand for financing, we’re also seeing opportunities that extend beyond traditional lending. Market dislocation is uncovering complex, transitional situations where capital solutions require a more opportunistic approach. Not in broad strokes but in carefully selected, well-structured transactions that require both creativity and discipline.
We are focused on opportunities where mispriced risk meets strong fundamentals, where we can structure downside protection and capture meaningful upside through preferred equity, recapitalizations and discounted acquisitions. Our underwriting process is rigorous, our execution repeatable and our orientation long term.
Across sectors, we are seeing the landscape shift. Hospitality is under pressure from deferred capital expenditures and near-term maturities. Multifamily faces valuation recalibration as cap rates rise and leverage recedes. Even in office, where secular headwinds persist, dislocation is beginning to yield selectively actionable opportunities. In each case, we are evaluating where structure, not just price, can drive durable, risk-adjusted returns.
This environment demands more than capital. It requires a stable, experienced team with the agility to work up and down the capital stack and the relationships to source deals early. That is what our platform was built for. With deep connectivity across lenders, owners and operators, we consistently uncover opportunities before they reach the broader market and execute with a clear philosophy, shared incentives and a team-based culture that rewards precision.
We are not chasing momentum or relying on market recovery to drive returns. We are focused on underwriting the business plan, aligning with operators and structuring for protection on the downside with the potential for asymmetric outcomes on the upside.
Like those who supplied the tools that built lasting fortunes during the Gold Rush, we are not chasing momentum or relying on chance. We are focused on providing the structure, discipline and alignment needed to uncover value where others see uncertainty. Cycles like this reward preparation and conviction, and we believe the months ahead will offer opportunities for those positioned to act with clarity and discipline.
We are ready to put the right tools to work.
Reuters | US summer flight bookings are down 10% year-on-year — even though airfares are cheaper — and the airline sector is lagging behind the wider market. Nevertheless, Greg Friedman of Peachtree Group says the market will pick up and even benefit in 2026.
Schwab Network: With the summer season well underway, Greg Friedman is bullish on hotel and travel stocks. He believes there's favoritism toward some companies that investors may not realize unless they look under the surface. Greg breaks down the trends he sees to explain why optimism is high for companies like Hyatt (H), Hilton (HLT), and Airbnb (ABNB).
In the latest Peachtree Point of View podcast episode, Daniel Savage, SVP of Investment & Strategy at Peachtree Group moderates a discussion with Peachtree CEO Greg Friedman and Executive Vice President of Investments Michael Ritz as they explore how the commercial real estate landscape has fundamentally shifted, creating unprecedented opportunities for special situations investing. The executives present a compelling case for deploying capital into special situations strategies—but the window won't remain open indefinitely.
The Market Reality: Strong Assets, Broken Capital Structures
Unlike previous cycles where distress stemmed from fundamental asset problems, today's opportunities are primarily driven by capital market volatility. As Michael Ritz explains: "Fundamentals generally across most commercial real estate assets outside of office are doing pretty well. But what we're seeing is just the heightened level of volatility" in capital markets.
This creates a unique environment where high-quality assets are trading at discounted valuations not because of operational issues, but due to financing constraints and capital structure challenges.
The Debt Market Disruption
The core driver of today's opportunity lies in the dramatic repricing of debt. With the Secured Overnight Financing Rate (SOFR) rising from near-zero levels during the pandemic to current elevated rates, traditional financing has both become more expensive. Banks are now underwriting to lower loan-to-value ratios while demanding higher debt service coverage ratios, creating significant gaps incapital stacks.
Consider this: a simple cap rate expansion from 8% to 9% can reduce a $100 million asset's value to $89 million overnight. When combined with reduced loan-to-values, property owners face substantial liquidity shortfalls that create entry points for special situations investors.
Three Key Investment Buckets
Investors should focus on three primary opportunity areas:
The Hospitality Sweet Spot
Hotels present particularly compelling opportunities, with outsized exposure to near-term debt maturities due to years of "extend and pretend" financing. The sector faces approximately $15-20 billion in deferred capital expenditures, coinciding with assets built during the 2008 supply surge now requiring their typical 14-year renovation cycle.
Why Traditional Players Can't Compete
The opportunity exists precisely because few firms can provide the hybrid solutions these situations demand. Success requires capabilities across both equity and credit, enabling structured investments such as junior debt with contingent repayment ("hopenotes"), preferred equity positions, or debt-to-own strategies.
Why Special Situation Investing Works Now
For investors evaluating special situation investing opportunities, the key is partnering with operators who possess both the capital flexibility and operational expertise to navigate complex deal structures. The current environment rewards those who can move quickly on opportunities that traditional lenders and equity providers cannot address.
As Greg Friedman notes, this represents the biggest mispriced risk opportunity in commercial real estate today. The question for investors isn't whether these opportunities exist; it's whether they're positioned to capitalize on them before the market corrects.
For a deeper dive into the market dynamics and investment strategies discussed here, listen to the full conversation on the Peachtree Point of View podcast. The episode provides additional insights into how investors can navigate today's special situations landscape and position themselves for outsized returns in this unique market environment.
THIS IS NOT AN OFFER OR SOLICITATION TO PURCHASE ANY SECURITY. AN OFFERING IS MADE ONLY BY THE PRIVATE PLACEMENT MEMORANDUM. SECURITIES OFFERED THROUGH PEACHTREE PC INVESTORS, LLC MEMBER FINRA/SIPC.
