Commercial Observer: Peachtree Closes $35M C-PACE Construction Loan on South Florida Apartments

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This article is republished with permission from Commercial Observer

Image of Jared Schlosser with CAD image of a multifamily development in Hollywood, Florida

Commercial Observer (February 4, 2025) - Starlife Group has secured $35 million of construction financing to build a multifamily development in Hollywood, Fla.,Commercial Observer can first report.

Peachtree Group originated the fixed-rate Commercial Property Assessment Clean Energy (C-PACE) loan on the developer’s planned 200-unit 21 Hollywood project.

SF Capital Group’s Matt Shane arranged the transaction, which will be used to support the 13-story project’s energy efficiency, envelope enhancements and hurricane resiliency measures.

Jared Schlosser, Peachtree Group’s senior vice president, said the long-term structure of the deal was an ideal approach for the project amid a high interest rate climate, with Peachtree covering 40 percent of the cost and Starlife Group contributing 60 percent equity. The 30-year loan is non recourse outside of a completion guarantee, according to Schlosser.

 “We handled theconstruction draws just like you would on a senior construction loan and wewere even able to fund a little bit of capital at close for the project to getstarted, so it ends up being a pretty accretive alternative compared to justtaking a low-leverage bank loan,” Schlosser told CO.

 “It acts like an insurance product where it’s a construction-to-perm deal, but it doesn’t have the traditional rights and remedies and recourse that may come along with traditional long-term financing,” Schlosser added. “Here it’s just a straight annual payment, which is easier to navigate for the borrower.”

Located at 2100 N.Federal Highway, the 21 Hollywood project broke ground late last year and is slated for completion in February 2027. Community amenities will include an infinity pool, a fitness center, outdoor kitchens, co working space and a dog park. The property will also feature 9,997 square feet of ground-floor retail.

 Fort Lauderdale-based Starlife purchased the 1.48-acre site across from South Broward High School for $6.5 million in 2023, according to the South Florida Business Journal. The development was designed by Kobi Karp Architecture.

 “Conventional construction loans are hard to find these days,” Shane said. “There was significant equity brought into the project, so it made the deal easy to do with PACE.”

Officials at Starlife Group did not immediately return a request for comment.

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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.

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Jared Schlosser: Right now, it's all about cash flow. It’s hard to underwrite any sort of pro forma growth unless there’s a real story behind it. Lenders are focused on the cash flow, and if you can achieve a 13% debt yield or higher, you qualify for generally permanent debt, CMBS, life company, or even bank takeouts. If you don’t meet that threshold, then you typically fall into the private credit space, which is where Peachtree Group comes in.

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Peachtree Group is a direct balance sheet lender focused on funding first mortgage bridge loans, mezzanine loans, preferred equity investments, and commercial property assessed clean energy (CPACE) financing, lending to all commercial real estate asset classes with a specialty in hotel financing. The Peachtree Group team has executed more than 297 transactions, originating more than $4.5 billion for projects seeking capital to complete acquisitions, recapitalizations, refinancing and renovations.

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"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