Yahoo – Catalysts - The commercial real estate market (CRE) has struggled amid a prolonged high-interest-rate environment, but hotels have continued to outperform as demand surpasses supply. Peachtree Group CEO Greg Friedman joined Catalysts to discuss the market outlook.
Friedman explained that the pandemic "muted" new supply growth, and as demand has picked up with limited new construction, he believes the hotel industry is benefiting from supply being constrained. He points out supply in the hotel sector is growing at a 40% reduction, while demand remains resilient.
Friedman notes that "from an investment perspective," hotel assets trade at higher cap rates. With rates expected to remain elevated, Friedman states, "there's less negative leverage," making the sector increasingly attractive.
Regarding office spaces, Friedman sees potential for recovery. "I think we're heading towards a bottoming across the office sector," he said, pointing to rising vacant spaces being repurposed and transformed for new uses. "I think we're heading towards it being more investable," he added.
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Many pivotal moments in Greg Friedman's life occurred against the backdrop of major economic shifts. He graduated college right before the dot-com bubble burst, and coincidentally walked away from an internet company he started at the tail-end of the boom. Just after he founded Peachtree Group, the private equity firm he leads, the Great Recession began, and he and his partners had to shift their business model. Friedman knows first hand the power of pivoting, which he says helped to lead his firm’s success more than 15 years later. Peachtree Group now counts 250 team members across all of its divisions.
Amid a market downturn, the retail space continues to defy inflationary pressures. Retailers seemingly didn’t get the memo of a softened market and are instead poised to continue opening storefronts and leasing space across the US. How can this possibly be? Mortgage Professional America turned to Greg Friedman, founder and CEO of commercial real estate private equity investor and lender Peachtree Group for answers.
After many years focusing on the hospitality sector, Peachtree has recently expanded its investment strategy to other asset classes, transitioning from Peachtree Hotel Group to Peachtree Group. Together with its lending division, Stonehill, the private equity investor and lender is now active across all real estate sectors, including retail—which has been grabbing headlines in the past few years due to the multiple changes it underwent. Commercial Property Executive asked Peachtree Group Founder & CEO Greg Friedman to talk about the opportunities and challenges for investors looking at this constantly evolving asset class. Today, retail seems to be defying inflationary pressures as retailers continue to open storefronts and leasing spaces across the U.S. For more market insights from Peachtree Group CEO Greg Friedman, follow him on LinkedIn.
