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ATLANTA (Dec. 9, 2024) – Peachtree Group (“Peachtree”) has reached a significant milestone in Commercial Property Assessed Clean Energy (CPACE) financing, surpassing the $1.0 billion mark—a distinction shared by only a select few companies in the industry. In 2024 alone, Peachtree completed 22 CPACE transactions across the U.S., surpassing its previous record for CPACE originations.
"In 2019, we launched CPACE, and today we've surpassed our first billion—a testament to the exceptional team and the strength of Peachtree’s vision,” said Jared Schlosser, Peachtree’s Executive Vice President of Hotel Lending and Head of CPACE. “Our strong foundation has not only fueled Peachtree’s success in CPACE financing but also solidified its position as a leader in the broader commercial real estate lending market.”
In the most recent loan origination rankings by the Mortgage Bankers Association, Peachtree was ranked as the seventh-largest commercial real estate investor-driven lender in the U.S.
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The firm’s $1.0 billion in CPACE financing is rooted in hospitality, which remains its largest segment comprising approximately 45% of its total. However, Peachtree has successfully expanded into other sectors, particularly residential communities (including multifamily, student housing and senior living), which now represent 22% of the portfolio or $220 million. Additionally, the firm has executed numerous CPACE transactions across industrial, mixed-use and office sectors, showcasing its versatility.
“In this challenging lending market, CPACE financing has emerged as a crucial source of liquidity for all commercial real estate sectors. This financing option is becoming increasingly essential as owners grapple with looming debt maturities and limited refinancing opportunities,” Schlosser said.
Commercial real estate remains in a turbulent period with trillions of dollars in debt maturing and refinancing becoming increasingly difficult due to tighter lending standards from traditional lenders. These challenges are reshaping the industry and forcing property owners to seek alternative financing solutions.
“CPACE has been a game-changer, offering long-term fixed-rate financing that lowers the cost of capital while enabling property owners to pursue energy-efficient upgrades with reduced financial strain,” Schlosser said. “Peachtree is proud to lead the way in expanding access to this innovative solution, helping owners across all commercial real estate sectors.”
In just over a decade, CPACE has reached a cumulative $7.2 billion in U.S. commercial real estate financings, according to PACE Nation, confirming the growing market adoption and acceptance of this financing tool.
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.
ATLANTA (August 18, 2024) – Peachtree Group (“Peachtree”) has originated the largest credit transaction in its history, closing a $176.5 million retroactive Commercial Property Assessed Clean Energy (“CPACE”) loan for Dreamscape Companies’ recently renovated 2,520-room Rio Hotel & Casino(“Rio”) in Las Vegas, Nev. The deal, finalized in less than 60 days, ranks among the largest CPACE financings ever completed in the United States.
The Rio, now under the Destinations by Hyatt brand, is a casino resort featuring two hotel towers, Ipanema and Masquerade, connected by a casino, restaurants and retail establishments. Renovations completed in 2024 included a full transformation of the Ipanema Tower guest suites, a reimagined casino floor and significant upgrades to multiple food and beverage venues. The comprehensive property improvement plan also delivered exterior enhancements, modernization of the central heating and cooling plant, electrical infrastructure upgrades and renovations to the convention center.
“This deal highlights an inflection point for CPACE, with some of the nation’s largest financial institutions consenting to its use because they see the clear benefit to the capital stack,” said Jared Schlosser, head of originations and CPACE for Peachtree. “By closing quickly on a marquee hospitality asset, we were able to strengthen the position of both the owner and its lenders.”
The CPACE loan retroactively funded the renovations enabling the owners to pay down their senior loan. Retroactive CPACE funding offers a distinct advantage by allowing 100% of the proceeds to be reimbursed for completed project costs.
“This transaction is not only a historic milestone for Peachtree Group, but also a testament to the ecosystem we have built over the past 18 years,” said Greg Friedman, managing principal and CEO of Peachtree. “Through our vertically integrated platform, deep expertise and disciplined approach, we have developed the infrastructure to be a leader in the private credit space. Our ability to deliver speed, creativity and certainty of execution positions us to provide capital solutions that create value for our investors and partners across market cycles.”
The CPACE market has surpassed $10 billion in cumulative U.S. originations in just over a decade, according to the C-PACE Alliance, with strong growth expected as more institutional owners and lenders recognize its value. “We see tremendous opportunity ahead for retroactive CPACE and its use in funding new commercial real estate development,” Schlosser said. “It’s an attractive alternative to more expensive forms of capital.”
Peachtree is one of the most active CPACE lenders in the country, with more than $1.5 billion in originations. The firm’s credit platform spans CPACE, bridge, mezzanine and construction lending, providing creative capital solutions across market cycles.
The hotel lending landscape continues to shift, shaped by rising rates, tighter equity, and the need for more creative capital structures.In this Hotel Business Magazine roundtable recap, Peachtree Group’s Michael Harper, President, Hotel Lending, and Jared Schlosser, Head of Credit Originations & Commercial CPACE, share insights on:
• Navigating the gap between buyer/seller expectations
• The growing role of private credit
• Structuring deals with CPACE, mezzanine, and hybrid financing
• Underwriting and execution in today’s higher-risk environment
Mergers & Acquisitions- Commercial Property Assessed Clean Energy, or CPACE financing, which allows commercial property owners to borrow money for energy efficiency, renewable energy generation, water conservation and other upgrade projects, is a growing market, and is largely being provided by private equity firms.
According to the CPACE Alliance, anon-profit that works to increase the volume of quality projects, this loan market is growing nicely (see chart below). The market hit over $10 billion in total originations by the end of 2024.
Jared Schlosser, the executive vice president and head of hotel originations and CPACE at Atlanta PE firm Peachtree Group, says the firm has averaged 25 percent year-over-year growth since it started CPACE lending at the end of 2019. He expects the market to grow as more states get access to CPACE.
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