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
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Peachtree Group, a diversified commercial real estate investment company, announced its credit division has closed $556 million in loan originations of the $1.1 billion the company deployed year-to-date. The remaining $526 million was deployed to acquire five hotels and undertake three new hotel development projects. The company also opened five hotels that were under construction as of September 2023.
“Commercial real estate owners who have benefited from an extended period of readily available, low-cost capital over the past 15 years are now confronting a new reality,” said Greg Friedman, Peachtree Group’s CEO.
The ability to refinance maturing debt is a growing concern with an estimated $1.9 trillion of U.S. commercial real estate debt maturing before the end of 2026.
“Commercial real estate participants are faced with the pressures of higher capital costs and tighter liquidity in sourcing capital for acquisition, recapitalizations and development strategies,” Friedman said.
Peachtree Group Credit, formerly Stonehill, ranked as the 8th largest U.S. commercial real estate hotel lender by the Mortgage Bankers Association 2022 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.
Notable credit transactions for hotels completed this year include:
Other commercial real estate sector transactions included:
Today, banks are under regulatory pressure and need to shore up their balance sheets and liquidity positions, causing significant lending restrictions to commercial real estate. This traditional lender disruption further elevates private credit for owners and developers to execute their business plans.
“We are experiencing an uptick in activity, with more than half of the loans that we originated closing within the past 60 days,” said Jared Schlosser, Peachtree Group’s senior vice president, Credit. “We are targeting more than $1.0 billion in originations for 2023 with continued growth into 2024 as we anticipate interest rates to remain elevated and banks to further reduce exposure.”
Peachtree Group’s acquisition division completed five hotel acquisitions with a total of 677 keys.
“Our transaction volume remains on pace as we have historically acquired 10 to15 hotels annually. The overall U.S. transaction market is down year-over-year, primarily due to 2022 being an active year while debt was still relatively affordable debt a wide availability of regional lenders and improving operating fundamentals whereas in 2023, the tightening of the debt capital markets has materially impacted transaction velocity,” said Brian Waldman, Peachtree Group’s CIO. “We have been uniquely positioned to acquire most of the hotels off-market leveraging our deep relationship network to secure these institutional-quality assets. We are also unique among our competitors as we have the ability to be an all-cash buyer, eliminating lending risk and closing quickly.”
Peachtree Group expects market transactions to accelerate through the remainder of the year and continue into 2024.
Year-to-date, Peachtree Group’s development division has closed on three new projects representing $293 million in aggregate value:
In addition, the development team has opened five hotels with a combined development cost of approximately $119 million:
The development division, which builds hotels on Peachtree Group’s behalf as well as through joint ventures with strategic partners, is expected to break ground prior to year-end on the construction of four more hotels with an aggregate value of $200 million.
CBRE projects new supply growth to average around 1% for the next three years, well below the amount of new supply growth experienced before the COVID-19 pandemic and less than the 2.5% pace of demand growth over the next three years.
“Supply growth of new hotel rooms continues to be hampered by the challenges from the pandemic and has been further impacted today with dislocation in the credit markets,” said Will Woodworth, vice president of investments, development, at Peachtree Group. “We believe supply will continue to be limited for the foreseeable future and have ramped up our development pipeline in response.”
If actual demand growth rates exceed what is forecasted, the hotel market could be facing a hotel room supply shortage. This would fuel the growth in occupancy rates and compression in room rates.
“Despite headwinds in the broader markets, Peachtree is well-positioned, capitalized and oriented to strategically target the submarkets and demand segments where new hotels rooms, when realized, will flourish,” Woodworth said.
About Peachtree Group
Peachtree Group is an investment firm driving growth with a diverse portfolio of commercial real estate assets and other ventures. The company has executed hundreds of investments since its inception, focusing on real estate acquisition, development and lending valued at almost $9.0 billion in total market capitalization. Today, Peachtree manages over $2.5 billion in equity, augmented by services designed to protect, support and grow its investments.
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