 |
| Greg Friedman |
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:
- A $47.9
million first mortgage loan for the construction of a 215-room Autograph
Collection hotel in Huntsville, Ala., which is expected to open in 2024.
- A $43.6
million first mortgage loan on the 220-room Hampton Inn New York-LaGuardia
Airport to recapitalize the project and to cover the cost of deferred
maintenance and CapEX.
- A $42.2
million first mortgage loan on the 133-room Motif on Music Row (Nashville)
to refinance the current debt and complete the property, which expects to
open in November 2023.
- An $8.4
million loan in CPACE financing to fund various energy-efficient and
sustainability elements of a hotel under construction in Detroit, Mich.
Other
commercial real estate sector transactions included:
- A $52.0
million first mortgage loan for the construction of a 245-unit apartment
in Mesa, Ariz.
- A $42.0
million first mortgage loan for the acquisition of the Town Center at Cobb
retail center in Kennesaw, Ga.
- A $23.0
million first mortgage loan for the construction of a mixed-use
development in Charlotte, N.C.
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.
 |
| Jared Schlosser |
“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.
- Hampton Inn
& Suites University Capital - Austin, Texas – 137 keys
- Homewood
Suites Vanderbilt - Nashville, Tenn. - 192 keys
- Hilton
Garden Inn Atlanta North – Johns Creek, Ga. – 122 keys
- Courtyard
Atlanta Kennesaw – Kennesaw, Ga.– 100 keys
- Home2
Suites by Hilton – Chandler, Ariz. – 126 rooms
“Our
transaction volume remains on pace as we have historically acquired 10 to15
hotels annually," said Brian Waldman, Peachtree Group’s CIO.
"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.
“We have been uniquely positioned to acquire
most of the hotels off-market leveraging our deep relationship network to
secure these institutional-quality assets.
 |
| Brian Waldman |
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:
· Embassy
Suites – Gulf Shores, Ala. – 257 keys
· Caption
by Hyatt – Nashville, Tenn. – 210 keys
· AC
by Marriott – Detroit, Mich. – 154-keys
In addition,
the development team has opened five hotels with a combined development cost of
approximately $119 million:
- Hilton
Garden Inn – Florence, Ky. – 123 keys
- Hilton
Garden Inn – Pensacola, Fla.– 102 keys
- Hampton Inn
– Delray Beach, Fla.– 143 keys
- Hampton Inn
and Home2 Suites – Lake Nona, Fla. – 150 Keys (80 Hampton Inn + 70 Home2
Suites)
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.
 |
| Will Woodworth |
“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.
CONTACTS:
Charles Talbert
678-823-7683
Chris Daly
President
DG Public
Relations
(703)
864-5553
