Peachtree Group is looking to take advantage of what it sees as an undervalued and mispriced hotel landscape, as well as other asset classes. That's why the investment manager firm has launched the Peachtree Special Situations Fund, aiming to raise $250 million.
The fund will seek off-market acquisitions and distressed opportunities, which include properties in post-foreclosure and through deed-in-lieu.
Hospitality will be a big focus, as some of the biggest capital expenditure burdens and refinancings in the $1 trillion commercial real estate maturities this year comes from hotel, according to Peachtree.
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Additionally, Peachtree noted that those who financed assets when interest rates were near zero are now facing "gaps" with their capital, with rates now elevated and liquidity tightening. The Atlanta-based firm said it wants to target high-quality assets that are distressed by capital structure, rather than "systemic" fundamentals
The Special Situations Fund will additionally seek to capitalize on other asset classes, including student housing, self storage and multifamily — as long as the opportunity is there to either stabilize or reposition properties.
While the fund will explore the national market, Peachtree envisions there will be "significant deal flow" in high-demand markets like California, Florida and Texas.
Additionally, the Special Situations Fund will be involved in lending by providing hybrid and preferred equity solutions for purchases and developments.
“We believe the next 12 to 18 months offer some of the most compelling risk-adjusted opportunities we’ve seen since the global financial crisis,” Greg Friedman, managing principal and CEO of Peachtree, said in a statement.
“As balance sheet stress and refinancing hurdles intensify in the hotel space and other commercial real estate sectors, Peachtree is uniquely positioned to deploy capital where it’s needed most, delivering attractive returns while providing real solutions for sponsors and lenders alike.”
The first close of the Special Situations Fund is estimated to happen within the next two to three months. And the final close is projected to be 18 months from when the initial one happens.
A report this March by CRED iQ found that 13 Metros held distress loan rates that were at least 20 percent. This was led by Minneapolis-St. Paul-Bloomington and MN-WI (49.7%) and Providence-New Bedford-Fall River, RI-MA (45.4%).
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Anthony Russo
Anthony Russo has been contributing to GlobeSt. since July 2024. Along with CRE, his financial background expands to capital markets, the economy, and consumer issues. Previously, he has written for CapitalWatch and was a senior reporter for The US Sun.
