Peachtree Group’s Expanding Footprint in Commercial Real Estate
2023 marks a monumental phase for Peachtree Group as they channel a staggering $1.1 billion into the commercial real estate realm. Diversifying this investment, the firm has endorsed both property acquisitions and novel hotel projects, reinforcing its dominance in the hospitality segment.
- Loan Originations: Peachtree Group’s Credit wing sanctioned loans worth $556 million, claiming a significant chunk of the company’s annual investment.
- Hotel Ventures: The surplus of $526 million supported the procurement of five hotels and the commencement of three fresh hotel undertakings.
In addition to their financial forays, September witnessed the inauguration of five hotels, previously in the construction phase.
“Over the last decade and a half, commercial real estate benefactors have enjoyed the luxury of easily accessible, economical capital. But the landscape is transforming,” asserts Greg Friedman, Peachtree Group’s CEO. He underscores the emerging challenges: soaring capital costs, liquidity constraints, and the imminent $1.9 trillion commercial real estate debt set to mature by 2026.
In the 2022 Mortgage Bankers Association rankings, Peachtree Group Credit, formerly known as Stonehill, secured its spot as the eighth leading U.S. commercial real estate hotel lender.
Peachtree’s Lending Portfolio:
Being a seasoned direct commercial real estate lender, Peachtree has diversified its loan offerings, originating from their roots in hospitality. Their 2023 loan ledger boasts:
- $47.9 million for a 215-room Autograph Collection hotel in Huntsville, AL.
- $43.6 million catering to the Hampton Inn New York-LaGuardia Airport’s maintenance and capital expenditure needs.
- $42.2 million allocated for Motif on Music Row, Nashville.
- An eco-conscious $8.4 million CPACE funding supporting a Detroit, MI hotel project.
Jared Schlosser, Peachtree Group’s Senior VP of Credit, envisions loan originations surpassing $1 billion in 2023, propelled by anticipated elevated interest rates and banks curtailing exposure.
The acquisition front has been bustling with Peachtree adding five hotels, summing up to 677 keys. Brian Waldman, CIO at Peachtree Group, alludes to the overarching market trends impacting transaction dynamics, especially the constriction in debt capital markets. Nevertheless, Peachtree’s acquisition strategy remains unwavering, with a tilt towards off-market purchases, given their cash-rich buying prowess.
Peachtree’s development arm has laid the foundation for three projects this year, aggregating to a value of $293 million. Moreover, five hotels, valued collectively at around $119 million, have also been launched. Will Woodworth, VP of Investments and Development, underscores the firm’s proactive approach amidst supply constraints stemming from the pandemic’s aftermath and credit market anomalies.
Reflecting its holistic vision, Peachtree unveiled a refreshed brand identity in September, emphasizing their cohesive investment approaches.