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Anatomy of the Deal | Revitalizing Lawrence: Peachtree’s $44MM Investment in The Benjamin
Lawrence, Indiana
Access to Private Credit,
Unlocked.
With trillions in loans maturing and traditional banks pulling back, leverage today’s market dislocation with an experienced private credit partner.
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Securities offered through Peachtree PC Investors LLC, member FINRA/SIPC. Additional information can be found HERE.
Successful transactions, showcased.
Browse Peachtree Group’s featured transactions and explore a diverse lending portfolio.
Private Credit,Explained.
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Private Credit FAQ's, answered.
What is private credit?
Private credit refers to non-bank lending where loans or credit are provided by private entities rather than traditional banks.This type of credit is often extended to companies that may not have access to public financing or prefer the flexibility of private arrangements. Private credit works through direct loans or investments made by private investors, hedge funds, private equity firms, or dedicated private credit funds to businesses or individuals. These loans can take various forms, including senior debt, mezzanine debt, and distressed debt.
Why is private credit growing?
Private credit is experiencing significant growth due to several factors:
- High Demand for Alternative Financing: Companies seeking flexible and swift financing options often prefer private credit over traditional bank loans.
- Attractive Returns: Investors are drawn to private credit for its potential to offer higher yields compared to traditional fixed-income investments.
- Economic Conditions: In low-interest-rate environments, private credit becomes an attractive option for investors looking for better returns.
- Regulatory Changes: Post-financial crisis regulations have limited banks' lending capacities, creating opportunities for private credit providers.
- Portfolio Diversification: Investors seek private credit for diversification, adding a different risk-return profile to their portfolios.
How do private credit funds work in commercial real estate?
Private credit funds in commercial real estate operate by pooling capital from multiple investors to provide loans to real estate projects. These funds can invest in various types of commercial real estate, including hotels, multifamily, office buildings, retail centers, and industrial properties. Investors can participate in private credit funds by buying shares or units of the fund.
- Investing in Private Credit Funds: Investors typically need to meet certain criteria, such as being accredited investors. They can invest through private placements or specialized investment platforms.
- Operations of Private Credit Funds: These funds manage the loan origination process, due diligence, and ongoing loan servicing, earning income through interest payments and fees.
How do private credit funds make money?
Private credit funds generate income primarily through:
- Interest Payments: The primary source of revenue is the interest charged on loans extended to borrowers.
- Origination Fees: Fees charged to borrowers for arranging and processing the loans.
- Management Fees: Fees paid by investors for managing the fund.
- Performance Fees: Some funds charge performance fees based on the returns generated.
What is private credit vs. private equity?
- Private Credit vs. Private Equity: While both involve investing in private companies, private credit refers to providing loans or credit, whereas private equity involves acquiring equity stakes in companies.
- Why Private Credit over Private Equity?: Private credit typically offers more predictable returns through interest payments and is often considered lower risk compared to the equity stakes that fluctuate with the company's performance.
Is direct lending private credit?
- Direct Lending as Private Credit: Yes, direct lending is a subset of private credit where lenders provide loans directly to borrowers without intermediaries like banks.
Is private credit the same as private debt?
- Private Credit vs. Private Debt: These terms are often used interchangeably, but private credit is a broader term encompassing all types of non-bank lending, including private debt.
- So is Private Debt the Same as Private Credit?: Yes, private debt is a type of private credit focusing specifically on debt instruments.
How big is the private credit market?
As of 2024, the private credit market continues to grow, with estimates suggesting it has surpassed $1.2 trillion in assets under management globally. This growth is fueled by increasing investor interest and the demand for alternative financing options.
Private Credit Investing offers the potential for higher returns and diversification but requires thorough research and understanding of the associated risks
Stay informed.
Read up on the latest news, trends, and analysis from our experts on private credit.
桃树 新闻和见解。
Yahoo! Finance: The hotel sector benefits from 'muted' supply
Peachtree CEO Greg Friedman recently shared insights on the market with Madison Mills of the Yahoo Finance show Catalysts.
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.
To watch more expert insights and analysis on the latest market action, check out more Catalysts here.
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Peachtree Group Surpasses $1.0 Billion in CPACE Financing
Peachtree Group has reached a significant milestone in Commercial Property Assessed Clean Energy (CPACE) financing, surpassing the $1.0 billion mark.
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ATLANTA (Dec. 9, 2024) – Peachtree Group (“Peachtree”) has reached a significant milestone in Commercial Property Assessed Clean Energy (CPACE) financing, surpassing the $1.0 billion mark—a distinction shared by only a select few companies in the industry. In 2024 alone, Peachtree completed 22 CPACE transactions across the U.S., surpassing its previous record for CPACE originations.
"In 2019, we launched CPACE, and today we've surpassed our first billion—a testament to the exceptional team and the strength of Peachtree’s vision,” said Jared Schlosser, Peachtree’s Executive Vice President of Hotel Lending and Head of CPACE. “Our strong foundation has not only fueled Peachtree’s success in CPACE financing but also solidified its position as a leader in the broader commercial real estate lending market.”
In the most recent loan origination rankings by the Mortgage Bankers Association, Peachtree was ranked as the seventh-largest commercial real estate investor-driven lender in the U.S.
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The firm’s $1.0 billion in CPACE financing is rooted in hospitality, which remains its largest segment comprising approximately 45% of its total. However, Peachtree has successfully expanded into other sectors, particularly residential communities (including multifamily, student housing and senior living), which now represent 22% of the portfolio or $220 million. Additionally, the firm has executed numerous CPACE transactions across industrial, mixed-use and office sectors, showcasing its versatility.
“In this challenging lending market, CPACE financing has emerged as a crucial source of liquidity for all commercial real estate sectors. This financing option is becoming increasingly essential as owners grapple with looming debt maturities and limited refinancing opportunities,” Schlosser said.
Commercial real estate remains in a turbulent period with trillions of dollars in debt maturing and refinancing becoming increasingly difficult due to tighter lending standards from traditional lenders. These challenges are reshaping the industry and forcing property owners to seek alternative financing solutions.
“CPACE has been a game-changer, offering long-term fixed-rate financing that lowers the cost of capital while enabling property owners to pursue energy-efficient upgrades with reduced financial strain,” Schlosser said. “Peachtree is proud to lead the way in expanding access to this innovative solution, helping owners across all commercial real estate sectors.”
In just over a decade, CPACE has reached a cumulative $7.2 billion in U.S. commercial real estate financings, according to PACE Nation, confirming the growing market adoption and acceptance of this financing tool.
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.