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Commercial Observer: Peachtree Group Supplies $36MM Refi for Houston Hotel Conversion Project
Peachtree Group originated a $36.1MM three-year, floating-rate loan with two 12-month extension for a Houston Hotel
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.
Hotel to Multi-family Conversion Case Study
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.
Benefits of Adaptive Reuse for Affordable Housing
Adaptive reuse provides various benefits, making it an attractive option for affordable housing development.
- Cost-effectiveness: Repurposing existing buildings for affordable housing can significantly reduce development costs compared to constructing new buildings. Existing structures often have solid foundations, basic infrastructure and utilities in place, which can save both time and money during the renovation process. This cost-effectiveness makes adaptive reuse an attractive option for affordable housing initiatives, as it maximizes available resources.
- Preservation of heritage: Adaptive reuse projects offer the opportunity to preserve and celebrate a city’s architectural heritage and historic landmarks. By repurposing buildings with historical significance, communities can retain their cultural identity and architectural character while addressing the pressing need for affordable housing. This approach promotes a sense of pride, connects residents with their city’s history, and contributes to the overall cultural fabric of the community.
- Sustainable solution: Utilizing existing structures through adaptive reuse aligns with sustainable development goals. It reduces the demand for new construction, which requires additional resources, energy, and land. Adaptive reuse minimizes waste generation and environmental impact associated with demolition and new construction by repurposing and renovating existing buildings. This approach promotes resource efficiency and contributes to the overall sustainability of urban development.
- Revitalization of neighborhoods: Converting vacant or underutilized buildings into affordable housing has the potential to revitalize neighborhoods. Adaptive reuse projects can attract residents, businesses, and investments to previously neglected areas by breathing new life into these spaces. This revitalization enhances economic growth, improves community aesthetics, and fosters a sense of pride and ownership among residents. It also supports community development by providing affordable housing options and improving the overall quality of life in the neighborhood.
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.
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Commercial Observer | Peachtree Group originated a $36.1MM three-year, floating-rate loan with two 12-month extension options for the DSG’s Meridien Houston Downtown hotel property located where the 1952-built Melrose Building once stood. In 2015, the developer acquired the office property, which was Houston’s first modern skyscraper, and repurposed it into a 250-room hotel that opened in 2017.
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Discover Creative Capital Solutions in a Challenging Market
In the latest episode of Peachtree Point of View podcast, CEO Greg Friedman sits down with EVP Jared Schlosser, who specializes in hotel lending and C-PACE financing. Their conversation offers valuable insights into navigating today's dislocated credit markets and finding creative solutions to capitalize commercial real estate projects.
In the latest episode of Peachtree Point of View podcast, CEO Greg Friedman sits down with EVP Jared Schlosser, who specializes in hotel lending and C-PACE financing. Their conversation offers valuable insights into navigating today's dislocated credit markets and finding creative solutions to capitalize commercial real estate projects.
Jared, who joined Peachtree in 2019 after beginning his career during the 2007 market downturn, provides a unique perspective on the dramatic shift in credit markets since then. He explains how developers are struggling with rising costs and persistently high interest rates that make traditional financing structures difficult to pencil.
Senior + CPACE
The discussion centers on how Peachtree is helping clients overcome these challenges, with particular focus on C-PACE (Commercial Property Assessed Clean Energy) financing as an innovative tool. This state-by-state legislative product allows financing for specific elements of construction (roofing, HVAC, elevators, etc.) through long-term fixed-rate loans repaid via property tax assessments.
What makes this strategy particularly powerful is the ability to combine C-PACE with senior debt to achieve higher leverage at a lower blended cost of capital. For example, on a $100 million project, developers might secure $30 million through C-PACE at 7.5% fixed (half the cost of traditional mezzanine debt), allowing them to finance 75% of project costs at favorable rates while maintaining acceptable returns.
Case Study: Washington Multifamily
Jared shares a recent success story from Washington state where Peachtree provided both senior debt and C-PACE financing, partnering with Hickory for mezzanine debt to deliver an impressive 87% capital stack. With Peachtree providing 70% through the combined senior and C-PACE loans, the borrower secured an attractive blended cost of capital for a higher-lever age construction loan. The multifamily project is located in an underserved secondary market with limited recent development—a focus area for Peachtree.The deal also featured flexible terms allowing the borrower to potentially payoff the C-PACE portion if rates decline.
Key Takeaways:
- C-PACE financing offers developers a powerful tool to replace more expensive capital in the stack, potentially reducing costs by hundreds of basis points compared to traditional mezzanine or preferred equity.
- In today's market, there are "no slam dunks" - every deal has challenges requiring creative solutions, thorough vetting, and proper risk structuring.
- Peachtree's ability to provide both senior loans and C-PACE financing creates a significant competitive advantage, allowing them to deliver financing packages higher up the capital stack.
- Speed and execution are critical in this environment, as many lenders fail to close deals due to improper risk assessment or changing credit committee decisions.
- Secondary markets with limited new supply present attractive investment opportunities, particularly for multifamily development.
Listen to the full Peachtree Point of View podcast to gain deeper insights into how you can leverage these creative capital solutions for your next commercial real estate project. Follow Peachtree Point of View on your favorite podcast platform to stay informed on investment strategies in today's challenging market.
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Peachtree Group Ranked Among the Largest Investor-Driven Commercial Real Estate Lenders in the U.S.
Peachtree Group ranked as the eighth-largest investor-driven commercial real estate lender in the U.S., according to the Mortgage Bankers Association’s (MBA) 2024 loan origination rankings.
ATLANTA (April 3, 2025) – Peachtree Group (“Peachtree”) ranked as the eighth-largest investor-driven commercial real estate lender in the U.S., according to the Mortgage Bankers Association’s (MBA) 2024 loan origination rankings. In 2024, Peachtree deployed approximately $1.6 billion in commercial real estate credit investments.
“With a substantial volume of maturities on the horizon and trillions in debt coming due through 2028, the current environment increasingly favors private credit lenders like Peachtree,” said Greg Friedman, managing principal and CEO of Peachtree. “We’re well-positioned to capitalize on these opportunities and help close the funding gap left by traditional capital sources.”
The MBA also ranked Peachtree as the seventh-largest U.S. commercial real estate hotel lender, marking its fourth consecutive year in the top ten. The firm also earned rankings across the office, multifamily, retail and industrial sectors.
“The hospitality sector continues to demonstrate remarkable resilience, driven by strong demand fundamentals,” said Michael Harper, president of hotel lending at Peachtree. “We remain committed to supporting owners and operators with expansion, renovation and refinancing needs—leveraging our strategic capital deployment and adaptability to drive long-term value.”
Amid ongoing market volatility, Peachtree deployed nearly $500 million in credit transactions during the 2025 first quarter and is on track to exceed its 2024 production targets. Notable originations this year include:
· $59.0 million bridge loan – AC / Element Hotel, San Antonio, Texas
· $51.5 million bridge loan and Commercial Property Assessed Clean Energy (CPACE) financing – Reserve at Vinedo, Paso Robles, Calif.
· $48.3 million bridge loan and CPACE financing – Yorkshire Apartments, Tumwater (Olympia), Wash.
· $43.0 million bridge loan – Home2 Suites / Tru Hotel, Fort Lauderdale, Fla.
· $42.8 million bridge loan – The Jax Apartments, Monroe, Ga
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“Our fourth consecutive top 10 year underscores the strength of our credit platform and our ability to lend through business cycles. These results reflect our reputation for reliability and delivering certainty of execution, even in the most volatile of market conditions,” Harper added.
As a direct commercial real estate lender, Peachtree offers a full suite of financing solutions, including permanent loans, bridge loans, mezzanine financing, CPACE (Commercial Property-Assessed Clean Energy) loans and preferred equity investments. The firm further expanded its capabilities last year by launching a Triple Net Lease (NNN) financing program to better support sponsors.
Peachtree reaffirmed its position as a leader in CPACE financing in 2024, setting a firm record with 22 transactions totaling $316.6 million. The CPACE team also recently surpassed $1 billion in total transaction volume—an achievement few in the lending industry can claim—further solidifying Peachtree’s success in expanding its lending platform and providing innovative financing solutions.
MBA's annual originations rankings report is a comprehensive set of listings of 149 commercial/multifamily mortgage originators, their 2024 volumes and their different roles.