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Commercial Observer: Peachtree Group Refis Seattle Hotel With $68MM Loan
Peachtree Group originated the three-year $68.15 million loan to refinance a newly opened Seattle hotel asset
ATLANTA (April 2, 2024) – Peachtree Group ("Peachtree") ranked as the seventh largest U.S. commercial real estate investor-driven lender by the Mortgage Bankers Association ("MBA") 2023 loan origination rankings. In 2023, Peachtree deployed over $1.0 billion in commercial real estate credit investments.
Peachtree was also ranked as the tenth largest U.S. commercial real estate hotel lender, its third consecutive year in the top ten. In addition, the firm was among the leading lenders in the retail, multifamily, industrial and 'other' sectors.
"We have experienced a wave of activity since the fourth quarter of 2023, driven by the expectation of persistent high-interest rates and a constrained lending environment from banks," said Greg Friedman, Peachtree's CEO and managing principal. "With traditional lenders stepping back, we have seen a pronounced shift in the capital markets at a time when there is a steep increase in debt maturities within the industry, potentially nearing $1 trillion in this year alone."
Amid the debt market dislocation, Peachtree has already deployed nearly $1.0 billion in credit transactions this year.
"The tidal wave of maturities and trillions of dollars more through 2028 favors private credit lenders like Peachtree to capitalize on these opportunities and close the funding gap left by traditional capital channels," Friedman said.
As a direct commercial real estate lender, Peachtree offers permanent loans, bridge loans, mezzanine loans commercial property-assessed clean energy (CPACE) financing and preferred equity investments across all commercial real estate sectors.
Stakeholders in the commercial real estate arena are navigating through this era marked by rising capital costs and limited liquidity. These conditions are particularly challenging when securing necessary capital for acquisitions, recapitalization and development initiatives.
"Years of dedicated effort in building our capital foundation have equipped us to support real estate owners in executing their business strategies, a commitment that remains firm even during uncertain times," Friedman 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, we manage billions in capital across acquisitions, development, and lending, augmented by services designed to protect, support and grow our investments. For more information, visit www.peachtreegroup.com.
Contact:
Charles Talbert
678-823-7683
ctalbert@peachtreegroup.com
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Commercial Observer | Peachtree Group originated the three-year, $68MM, floating-rate, first-mortgage loan with two 12-month extension options for the Atlanta-based developer’s 200-room AC Hotel in Downtown Seattle that opened in October 2024.
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Commercial Observer: Peachtree Group Supplies $36MM Refi for Houston Hotel Conversion Project
Peachtree Group originated a $36.1MM three-year, floating-rate loan with two 12-month extension for a Houston Hotel
Commercial Observer | Peachtree Group originated a $36.1MM three-year, floating-rate loan with two 12-month extension options for the DSG’s Meridien Houston Downtown hotel property located where the 1952-built Melrose Building once stood. In 2015, the developer acquired the office property, which was Houston’s first modern skyscraper, and repurposed it into a 250-room hotel that opened in 2017.
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Discover Creative Capital Solutions in a Challenging Market
In the latest episode of Peachtree Point of View podcast, CEO Greg Friedman sits down with EVP Jared Schlosser, who specializes in hotel lending and C-PACE financing. Their conversation offers valuable insights into navigating today's dislocated credit markets and finding creative solutions to capitalize commercial real estate projects.
In the latest episode of Peachtree Point of View podcast, CEO Greg Friedman sits down with EVP Jared Schlosser, who specializes in hotel lending and C-PACE financing. Their conversation offers valuable insights into navigating today's dislocated credit markets and finding creative solutions to capitalize commercial real estate projects.
Jared, who joined Peachtree in 2019 after beginning his career during the 2007 market downturn, provides a unique perspective on the dramatic shift in credit markets since then. He explains how developers are struggling with rising costs and persistently high interest rates that make traditional financing structures difficult to pencil.
Senior + CPACE
The discussion centers on how Peachtree is helping clients overcome these challenges, with particular focus on C-PACE (Commercial Property Assessed Clean Energy) financing as an innovative tool. This state-by-state legislative product allows financing for specific elements of construction (roofing, HVAC, elevators, etc.) through long-term fixed-rate loans repaid via property tax assessments.
What makes this strategy particularly powerful is the ability to combine C-PACE with senior debt to achieve higher leverage at a lower blended cost of capital. For example, on a $100 million project, developers might secure $30 million through C-PACE at 7.5% fixed (half the cost of traditional mezzanine debt), allowing them to finance 75% of project costs at favorable rates while maintaining acceptable returns.
Case Study: Washington Multifamily
Jared shares a recent success story from Washington state where Peachtree provided both senior debt and C-PACE financing, partnering with Hickory for mezzanine debt to deliver an impressive 87% capital stack. With Peachtree providing 70% through the combined senior and C-PACE loans, the borrower secured an attractive blended cost of capital for a higher-lever age construction loan. The multifamily project is located in an underserved secondary market with limited recent development—a focus area for Peachtree.The deal also featured flexible terms allowing the borrower to potentially payoff the C-PACE portion if rates decline.
Key Takeaways:
- C-PACE financing offers developers a powerful tool to replace more expensive capital in the stack, potentially reducing costs by hundreds of basis points compared to traditional mezzanine or preferred equity.
- In today's market, there are "no slam dunks" - every deal has challenges requiring creative solutions, thorough vetting, and proper risk structuring.
- Peachtree's ability to provide both senior loans and C-PACE financing creates a significant competitive advantage, allowing them to deliver financing packages higher up the capital stack.
- Speed and execution are critical in this environment, as many lenders fail to close deals due to improper risk assessment or changing credit committee decisions.
- Secondary markets with limited new supply present attractive investment opportunities, particularly for multifamily development.
Listen to the full Peachtree Point of View podcast to gain deeper insights into how you can leverage these creative capital solutions for your next commercial real estate project. Follow Peachtree Point of View on your favorite podcast platform to stay informed on investment strategies in today's challenging market.
