Bloomberg TV: Impact of Fed Rate Cuts on CRE
Greg Friedman, CEO of Peachtree Group, discussed the potential impact of the Fed's expected 25 basis point rate cut on commercial real estate.
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
- 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
- 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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Bloomberg TV - Greg Friedman, CEO of Peachtree Group, discussed the potential impact of the Fed's expected 25 basis point rate cut on commercial real estate. He noted that the 10-year treasury rate, currently at 4%, is already high, impacting commercial real estate values. Friedman expects the terminal rate to be around 2.75%, supporting the 10-year rate. He highlighted the stress from maturing loans, with $1 trillion due in the next year, and the opportunity for investors. Friedman also mentioned the thin risk premium spreads in commercial real estate, with multifamily assets trading at 5% cap rates. He emphasized the importance of credit investments over equity due to better risk-adjusted returns and the continued relevance of clean energy financing in commercial real estate.
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