Peachtree Group Timeline

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2007 – Peachtree Hotel Group is Founded

Greg Friedman and Mitul Patel form Peachtree Hotel Group as a family office to invest in premium-branded select service hotels.

2008 – Peachtree Grows Beyond Investing

Peachtree launched complementary divisions to develop and operate hotels, Peachtree Hospitality Development and Peachtree Hospitality Management, respectively. Over the next decade, the company continues to rapidly grow its portfolio of limited- and select-service hotels, becoming one of the nation's fastest-growing hotel acquisition, management, development and ownership groups in premium-branded hotels under the Marriott, Starwood, Hilton, Hyatt, and InterContinental Hotel group flags.

2009 – Executive Team Expands and Great Financial Crisis Hits

Jatin Desai joins Peachtree as managing principal chief investment officer and chief financial officer. The company expands investment offerings beyond equity investing into credit investments, acquiring debt positions secured by hotel and other real estate assets. As the Great Financial Crisis took hold, Peachtree implemented a distressed investment strategy and invested in 47 distressed hotels.

2012 - Stonehill Launches as Peachtree's Commercial Real Estate Lender Affiliate

Peachtree launched Stonehill, a direct commercial real estate lending division, to focus on debt originations and note acquisitions. Stonehill focuses on transitional assets and sectors of the credit market that traditionally have had more limited access to financing, eventually becoming a top 10 U.S. commercial real estate hotel lender as ranked by the Mortgage Bankers Association ("MBA").

2014 – Peachtree Reorganizes and Launches First Credit Investment Vehicle

Peachtree Group reorganized from a family office to a vertically integrated private equity firm. The company launched its first investment vehicle focused on acquiring and originating debt investments in select-service hotels.

2016 – Peachtree Raises its First Equity Investment Vehicle

Peachtree launched its first discretionary equity investment vehicle to acquire and develop premium-branded hotels and other commercial real estate assets.


2018 – Peachtree Expands into Land Development

Peachtree launches Revive Land Group, a land development division focused on designing, entitling and developing residential and mixed-use projects. Revive has since transacted on over $50MM of real estate, consisting of over 1,100 residential lots.

2019 – Peachtree Further Expands Product Portfolio with Launches in CPACE

Stonehill PACE was established as a direct lender focusing on property assessed clean energy for diverse commercial real estate asset classes. Over time, it evolved into one of the prominent CPACE providers in the U.S., securing over $600 million in CPACE financing. Also, Peachtree initiated a mortgage Real Estate Investment Trust (REIT) specializing in financing income-generating real estate. This REIT's scope involved acquiring or originating mortgages and mortgage-backed securities. The company further expanded its endeavours by investing into hotel development within Qualified Opportunity Zones. This strategic move aimed to leverage the tax deferral benefits offered by the Tax Cuts and Jobs Act of 2017.

2019 – Peachtree Adds Broker-Dealer

Peachtree PC Investors (PPCI), a FINRA-registered broker-dealer, becomes Peachtree's exclusive managing broker-dealer for the firms' investment offerings.

2020 – Distressed Opportunity as Pandemic Hits

The onset of the pandemic triggered an unexpected "Black Swan" event, plunging the U.S. into a recession and significantly impacting various sectors, notably the commercial real estate industry, particularly in hospitality. In response, Peachtree initiated its most extensive investment initiative to date, focusing on real estate and related assets. This strategic move aimed to capitalize on the emerging opportunities resulting from market disruptions, operational inefficiencies, under-capitalizations, and expected cyclical rebounds. Throughout this period, the firm executed transactions totaling $3 billion in asset value, encompassing debt and equity investments. Notably, Peachtree acquired over 180 first mortgage notes as part of its investment activities, positioning itself within a diverse array of real estate assets.

2021 – Capital Market Disruption Allows for Follow On Investment Vehicle

Continued disruptions caused by the pandemic have led to financial strain among ownership groups and developers due to reduced access to capital. In response, the company introduces its twelfth sponsored investment vehicle, aiming to engage in opportunistic debt and equity investments. This strategic move capitalized on emerging investment opportunities within the hospitality industry and other real estate sectors that have been impacted, too.

2022 – Peachtree Expands into Film Production Financing

Gala Media Capital was launched to finance the production of films and television

2022 - Peachtree Expands Commercial Real Estate Strategy and Changes Name

Daniel Siegel joins Stonehill as Principal CRE, bringing a team of experienced originators outside the hospitality industry to expand Peachtree's commercial lending business. In addition, Peachtree expands its array of high-quality, diversified investment strategies and vehicles by launching a 1031 Exchange DST program to enhance its tax deferral strategies in the hospitality sector. Due to Peachtree’s expansion into non-hospitality investments across the ecosystem, the company drops “Hotel” from the name and becomes Peachtree Group, continuing to grow beyond hospitality.

2023 – Peachtree Group Enters Year as a Leading CRE Investment Manager surpassing

$9B+ Asset Value and $2.5B+ Capital Under Management

As the portfolio of commercial real estate investments expanded, Peachtree consolidated all affiliated companies, notably Stonehill, Stonehill PACE, and Peachtree Hospitality Management, under the Peachtree Group umbrella. The firm adds to its vertically integrated management platform with the addition of an EB-5 program to access low-cost capital, diversify its funding sources and invest in job-creating projects across the U.S. Doubling in size since 2020, Peachtree Group has achieved renowned success through investments based on its ability to deploy capital opportunistically through business cycles, taking advantage of its holistic view of the market.

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Why Lenders Require Comfort Letters for Branded Hotel Financing

Investing in a franchise hotel can be a good way to diversify your portfolio and to achieve solid returns over an extended period of time. Comfort letters are designed to provide a legal framework for lenders and franchisors to handle situations in which the hotel purchaser defaults on the loan. Here are some facts ever investor should know about comfort letters.

Investing in a franchise hotel can be a good way to diversify your portfolio and to achieve solid returns over an extended period of time. Finding the right hotel financing options can make this acquisition even more profitable. Comfort letters are designed to provide a legal framework for lenders and franchisors to handle situations in which the hotel purchaser defaults on the loan. Here are some facts ever investor should know about comfort letters.

What are Comfort Letters?

Comfort letters are documents that allow lenders to assume franchise rights if the original franchisee defaults on the loan. These letters include provisions that ensure that lenders can continue to operate the hotel in the event of default or foreclosure on franchise hotel loans.

Benefits of Comfort Letters

Comfort letters offer several benefits for all parties involved in the transaction, including the following:

  • Borrowers are more likely to find the most attractive hotel lending arrangements if the lenders have greater certainty that they will be able to recoup their investment even if the borrower defaults. This can improve the terms of these loans and can make it easier to obtain the financing needed to acquire franchise properties.
  • Lenders can more effectively collateralize their loans by ensuring the ability to maintain the profitability of the properties they finance.
  • Franchise companies can protect their brand name by continuing operations and maintain a presence even when franchisees fail to meet their financial obligations and go into default on their hotel loans.

Many lenders require comfort letters before they will finalize loans for franchise hotel properties.

Crafted by the Franchise Company

In most cases, the comfort letter is drawn up by the franchise company as part of the franchising process. These legal documents may follow a standardized template or may be customized to suit the needs of the borrower and the lender. The contents of the letter may include some or all of the following provisions:

  • A provision that ensures the ability of the lender to appoint a receiver to operate the hotel for a short period of time during foreclosure proceedings.
  • A clause that allows the lender to cure any default of the franchise agreement before it is terminated.
  • A provision that allows for the resale of the property and the transfer of the franchise agreement to a third party if the hotel goes into default.

These provisions are designed to protect the lender if the hotel financing loan goes into default.

About Peachtree Group

Peachtree Group is a direct lender with a specialty in hospitality lending. Our originators work with investors across the US to provide the most practical hotel financing arrangements for their specific needs. Contact us today to discuss your financial needs with one of our expert loan originators. We work with you to provide the best options for your hotel financing requirements.

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5 Proven Tips for Securing Funding in a Turbulent Market

It's a tough market. But we've been here before. Peachtree President and Principal CRE Daniel Siegel shares insights garnered by our team after completing hundreds of transactions worth north of $15 billion. Need capital, but not sure how to do it - read on for Daniel's time-tested tips.

Statista estimates the value of the commercial real estate market will reach $24.67 trillion in 2023. According to the Deloitte Center for Financial Services 2024 industry outlook, half the industry expects the cost of capital and capital availability to worsen through next year. Couple that with the $1.5 trillion wall of debt maturing before the end of 2025 and it’s easy to understand the trepidation in the market today.

But we’ve been here before.

The credit team at Peachtree Group has completed hundreds of transactions worth north of $15 billion. In our collective careers, we have seen borrowers navigate unstable markets, such as what we are experiencing today, in a variety of different ways.

Here are five tips for borrowers trying to navigate today’s difficult market, and secure funding for their project.

Acknowledging your Situation

It has been a borrower’s market for several years now, and this is not one of them. Do not forsake the term sheet in your hand – the Fed has raised interest rates 11 times since March of 2022. Spending too much time on turns of a term sheet might leave you losing any spread concessions to increases in the benchmark or, even worse – lenders deciding to pull terms altogether. If you have an offer from someone you trust, you might want to take it.

Grass Isn't Always Greener

On existing projects, your current lender is most likely your best friend. A lender willing to give you an extension is gold in this market. Getting additional terms out of your current lender is likely the least costly option, even if it comes with fees and a rate increase – it likely is still significantly less costly than what the current market will give you. However, I hope that you have been a good borrower – up to date on deliverables, communicative about the status of your project, etc. – make no mistake, the bank is doing you a favor, don't give credit committee a reason to say no.

Have you Considered CPACE

Being one of the largest CPACE originators in the country, Peachtree has seen a significant increase in pipeline looking to apply proceeds retroactively.  Properties are eligible for CPACE up to 3 years after certificate of occupancy in approved municipalities and proceeds can generally be up to 35% of stabilized value.  It’s a source of capital that has become more interesting to first mortgage lenders as the proceeds could be used to paydown your first mortgage and size a new interest reserve.

Try to Pay for your Overages and Carry Upfront

We pride ourselves on being lenders who want to be part of the solution when a deal has a budget bust or stabilization is taking longer than anticipated. However, I always encourage borrowers to size up their budget contingencies (i.e., 7% vs. 5%) or structure additional interest reserves. Yes, it will increase your initial capitalization, but your lender will pick up 60-70% of that cost in the loan funding. It may mean more work on the initial capital raise, but it's usually less costly than going back to your lender and/or equity mid-project to get additional capital.

Communication, Honesty and Transparency are Key

Lenders have access to data and information. They ultimately will discover the truth; it might as well come from you. This includes prior credit aberrations or issues and accurate property performance information. We have capital specifically for lending on special situations – there are a lot of deal-level risks that can be mitigated, but lack of trust with sponsorship is not one of them.

In uncertain times, hope for the best but prepare for the worst. Peachtree is an experienced capital partner who understands commercial real estate's nuances. With funding options limited from traditional lenders, our team has the lending solutions, financial capacity, and expertise to close complex transactions in today's challenging capital market environment.

We are available to discuss your lending options that meet your business objectives. Visit us at www.peachtreegroup.com.

Daniel Siegel is president and principal of Peachtree's commercial real estate lending group.

Before joining Peachtree, he was with Ardent Companies as managing director and the head of high-yield investments leading the company’s debt investments. Prior to that, Daniel was vice president of acquisitions at Rialto Capital, overseeing the distressed loan acquisitions platform. During his tenure at Rialto, Daniel directly oversaw the acquisition of commercial real estate loans on domestic and international opportunities. Additionally, he developed the firm’s small balance loan acquisition platform and led the company’s first European acquisition.

Daniel has a bachelor’s degree in finance from Tulane University. Contact him at dsiegel@peachtreegroup.com.

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Reviving Malls: Shifting Perspectives on Retail's Potential

Is mall still a four letter word? Retail, including malls is experiencing strong leasing momentum, but to be successful, retail investors need to consider these tips.

In today’s highly competitive and constantly evolving real estate market, sponsors of retail commercial properties need a reliable financial partner to help them navigate the complexities of this space. There is a perception that capital is non-existent for this sector, but that couldn’t be further from the truth. Peachtree Group Credit has emerged as an industry leader – ranking as the 16thlargest U.S. commercial real estate retail lender ranking as the 16th largest U.S. commercial real estate retail lender – providing creative financing solutions to help clients realize their vision for maximizing return on investment.

The fact is retail, including malls, is experiencing strong leasing momentum with increased foot traffic allowing sponsors to stabilize cash flow levels, which took a hit during the beginning of the COVID-19 pandemic. Brick-and-mortar retail locations are a necessary and growing component of a retailer’s multi-channel strategy. While traditional retail struggled before COVID, the pandemic has brought greater appreciation for in-store experiences for certain shopping items. This trend bodes well for retail as an investment.

To remain competitive, retail investors must accelerate their plans and expand their thinking to find ways to keep their retail locations relevant in a changing landscape.

Retail investors are looking at this sector with compelling strategies, including reimagining portions of the property to bring in new tenants, densifying the property by spinning off excess parking into pad sites or value-add components with a plan for re-leasing and some potential redevelopment opportunities.

Peachtree provides needed liquidity for maturing loans, new acquisitions and construction projects.

Some of the recent coast-to-coast mall transactions completed, include:

  • Bellis Fair Mall – Originating a$24.0 million first mortgage loan for the 774,264 square-foot shopping mall in Bellingham, Washington.
  • Cumberland Mall – Originating a$28.8 million first mortgage loan for the 953,313 square-foot shopping mall in Vineland, New Jersey.
  • Greenwood Mall – Originating a$42.3 million first mortgage loan for the 970,523 square-foot shopping mall in Bowling Green, Kentucky.
  • The Mall at Robinson – Originating a$25.5 million first mortgage loan for the 874,000 square-foot shopping mall in Pittsburgh, Pennsylvania.
  • TownCenter at Cobb – Originating a $42.0million first mortgage for a 1,200,000 square-foot shopping mall in Kennesaw, GA
  • Fairlane Town Center – Originating a $28.0million first mortgage for a 1,450,000 square foot shopping mall in Dearborn, MI

Peachtree actively collaborates with sponsors from the initial concept stage until closing, offering expedited financing explicitly tailored for their business, allowing all parties to achieve a best-in-class financial outcome. Throughout the process, Peachtree keeps up regular touchpoints, ensuring the transactions go smoothly. This further demonstrates Stonehill’s commitment to supporting sponsor capital strategies with execution certainty amid a highly unpredictable funding landscape, increasingly a critical variable impacting retail real estate acquisition competition outcomes.

Having access to an experienced lender can provide valuable expertise and guidance to help you with your investment. With specific retail knowledge, Peachtree can provide insights into effective strategies for success. At Peachtree, we have the expertise to guide you through your options.

 

Greg Koenig is a senior vice president at Peachtree Group Credit. Before joining Peachtree, he was an executive director at A large private equity firm, focusing on debt originations in all asset classes. Prior to that, Greg was a senior vice president at Newport RE, a German-based real estate investment company, focusing on acquisitions and asset management for its U.S. portfolio. Previously, he was a vice president at Rialto Capital, where he helped underwrite and asset-manage loan portfolios. Before joining Rialto, Greg worked at TriMont Real Estate Advisors facilitating loan workouts and maximizing returns on distressed assets. Greg holds a bachelor’s degree from the University of Connecticut, where he majored in Real Estate and UrbanEconomics.

Contact Greg at gkoenig@peachtreegroup.com or 1-860-833-2285.