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.
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ATLANTA (April 2, 2024) – Peachtree Group ("Peachtree") ranked as the seventh largest U.S. commercial real estate investor-driven lender by the Mortgage Bankers Association ("MBA") 2023 loan origination rankings. In 2023, Peachtree deployed over $1.0 billion in commercial real estate credit investments.
Peachtree was also ranked as the tenth largest U.S. commercial real estate hotel lender, its third consecutive year in the top ten. In addition, the firm was among the leading lenders in the retail, multifamily, industrial and 'other' sectors.
"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
ATLANTA (March 18, 2024) – Peachtree Group (“Peachtree”), a diversified commercial real estate investment firm, announced it has closed approximately $660 million in credit investments since Dec. 1, 2023, with an additional $350 million anticipated closing over the next 30 to 45 days.
The credit investments primarily encompass originations for hotels, multifamily, industrial and student housing.
In February, Peachtree closed one of the largest individual credit transactions in the firm's history with a $102.9 million three-year loan to recapitalize a 350‐room Marriott dual-brand AC Hotel Sunnyvale Moffett Park and TETRA Hotel, Autograph Collection in Sunnyvale, Calif.
"We are witnessing heightened activity in response to the anticipation of sustained elevated interest rates and continued reductions in bank exposure. The pressing need to refinance maturing debt, estimated at $2.8 trillion in U.S. commercial real estate debt by the end of 2028, is a growing concern. Commercial real estate stakeholders are grappling with the challenges of increased capital costs and constrained liquidity, particularly in securing capital for acquisitions, recapitalizations and development initiatives,” said Greg Friedman, Peachtree Group’s managing principal and CEO.
Peachtree Group's credit division, formerly Stonehill, ranked as the 8th largest U.S. commercial real estate hotel lender by the Mortgage Bankers Association in its last loan origination rankings.
As a direct commercial real estate lender, it offers permanent loans, bridge loans, mezzanine loans, commercial property-asset clean energy (CPACE) financing and preferred equity investments across all commercial real estate sectors, with its origins in the hospitality industry.
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.
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Contact:
CharlesTalbert
678-823-7683
ctalbert@peachtreegroup.com
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.
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.
Comfort letters offer several benefits for all parties involved in the transaction, including the following:
Many lenders require comfort letters before they will finalize loans for franchise hotel properties.
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:
These provisions are designed to protect the lender if the hotel financing loan goes into default.
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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