Greg Friedman and Mitul Patel form Peachtree Hotel Group as a family office to invest in premium-branded select service hotels.
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.
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.
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").
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.
Peachtree launched its first discretionary equity investment vehicle to acquire and develop premium-branded hotels and other commercial real estate assets.
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.
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.
Peachtree PC Investors (PPCI), a FINRA-registered broker-dealer, becomes Peachtree's exclusive managing broker-dealer for the firms' investment offerings.
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.
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.
Gala Media Capital was launched to finance the production of films and television
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.
$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.
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.
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.
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.
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.
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.
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.
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:
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.
As cities grapple with limited resources and urban revitalization, one innovative approach gaining traction is adaptive reuse. By repurposing existing structures, such as warehouses, factories and office buildings, adaptive reuse offers a sustainable solution to create affordable housing. However, financing these projects can pose a significant challenge.
The priority of financing an adaptive reuse project is finding an experienced lender, which will increase the chances of a smooth funding process.
The challenges and risks associated with repurposing existing structures can make traditional lenders hesitant to provide financing. In such cases, alternative lenders like, who specializes in adaptive reuse and has a track record of working with these projects, can be a valuable resource.
Stonehill has a deep understanding of the unique considerations involved in adaptive reuse, such as the complexities of assessing the property’s value, estimating renovation costs, and managing potential environmental or structural issues. As a result, Stonehill is usually more willing to provide flexible terms and agreements to accommodate the specific needs and challenges of adaptive reuse projects.
Stonehill recently financed $11 million for the conversion of a former 195-key conference hotel into 195 affordable studio apartment units. The hotel’s conference space was transitioned to resident amenities including a fitness center, common laundry facilities, lounge areas, large outdoor courtyard and co-working space.
In addition to the sponsor’s experience in workforce housing, the business plan was attractive to Stonehill because of the strong traditional apartment market and demonstrated population growth in the area. And, once complete, the development offers new apartment product at affordable rents for the market.
Adaptive reuse provides various benefits, making it an attractive option for affordable housing development.
Considering these benefits, adaptive reuse is a multifaceted approach that addresses the affordable housing crisis and promotes sustainability, heritage preservation and community revitalization. It is an innovative solution that leverages existing resources to create positive social and environmental impacts in urban areas.
Working with Peachtree Group in financing adaptive reuse into affordable housing can increase the chances of securing the necessary funding, navigating the process’s complexities, and ensuring a higher likelihood of project success. Contact me today to discuss your project dsiegel@peachtreegroup.com.
Daniel Siegel is principal and president of Peachtree’s commercial real estate lending group overseeing the group’s expansion into commercial real estate lending. Before joining Peachtree, he was managing director at a large private equity firm and the head of high-yield investments. Prior to joining that firm, Siegel was vice president of acquisitions at Rialto Capital, overseeing the distressed loan acquisitions platform. During his tenure at Rialto, Siegel directly oversaw the acquisition of commercial real estate loans on both domestic and international opportunities. Additionally, he developed the firm’s small balance loan acquisition platform and led the company’s first European acquisition. Siegel has a bachelor’s degree in finance from Tulane University.
Contact Daniel at dsiegel@peachtreegroup.com.