Industry News and Investment Knowledge

STONEHILL, A COMMERCIAL real estate direct lender and Peachtree Group affiliate, is now ranked as the 8th largest U.S. commercial real estate hotel lender by the Mortgage Bankers Association’s 2022 loan originations rankings, a two-spot increase from its 2021 ranking. Stonehill deployed $1.2 billion in real estate investment, with $813 million for hotels in 2022, the company said in a statement.

Meanwhile, Stonehill is also ranked as the 16th largest U.S. commercial real estate retail lender by MBA, having deployed $163 million in 2022, the statement added.

The last three years have been turbulent, and I could point to numerous events that have been unprecedented: a global pandemic, record-high inflation, geopolitical events and rising interest rates—all of these macroeconomic issues we have had to navigate. Yet, even with these headwinds, 2022 was another record year of investment activity for Peachtree Group. In addition, we solidified Peachtree's foundation for our next growth phase and continued to expand our investment offerings. I feel confident in saying we are meeting the moment.

For hospitality, demand and secular trends bode well for long-term outperformance in this sector. Hospitality fundamentals remain strong, with demand rising above pre-pandemic levels and ADRs at record highs. And with slower GDP growth expected to lead to a potential recessionary period, industry analysts still expect hospitality to remain resilient.

Stonehill, a commercial real estate direct lender, completed $1.2 billion in investments for 2022 through loan originations and commercial property assessed clean energy financing (CPACE), primarily in the hospitality and retail sectors, with $813 million and $163 million in investments completed, respectively. The remaining $269 million was distributed across the industrial, land, mixed-use, multi-family, office and senior living real estate sectors.

“Economic volatility coupled with uncertainty surrounding interest rates has severely decreased overall financing availability with capital providers,” said Mat Crosswy, president/principal, Stonehill. “However, Stonehill not requiring capital markets execution has allowed it to remain active and to fill the gap in lending supply.”

Peachtree Hospitality Management (PHM) has formed a long-term partnership with Savannah-based HOS Management (HOS) to operate nine of its hotels, with the potential for additional locations to be managed in the future. The current HOS hotel properties are primarily in the U.S. Southeast and are Marriott, Hilton, and IHG-branded hotels.

“We have a wealth of experience managing hotels and providing best-in-class operations for our valued partners like HOS Management, who have entrusted us with their hotel operations,” said Patrick Short, PHM’S president. “With 25 percent of our portfolio third-party managed, we are committed to protecting the value of the assets and driving bottom lines results for our partners while providing an outstanding experience for our hotel guests.”

Stonehill has deployed $160 million of capital for the acquisition of five regional malls across the U.S., Commercial Observer has learned.

The largest of the transactions involved a $42.3 million first-mortgage loan for Greenwood Mall, a 970,523-square-foot shopping center in Bowling Green, Ky., owned by Kohan Retail Investment Group. The firm also supplied a $42 million first-mortgage loan for Kohan’s 970,000-square-foot Livingston Mall property in Livingston, N.J.

Peachtree Hospitality Management, an affiliate of Peachtree Group, named Rachel Huang as vice president of hotel analytics & support. She will report to Patrick Short, PHM’s president.

Huang brings with her 20-plus years of international hospitality analytics and project management experience. She will lead PHM’s business intelligence strategy in providing data-backed decision support across multiple functions in her new role.

Peachtree Group has appointed Michael Bernath as SVP, acquisitions. In this role, he reports to Brian Waldman, Peachtree’s chief investment officer, and oversees the company’s national hospitality acquisition program.

Bernath brings more than 15 years of hospitality real estate experience to Peachtree. He most recently served as a principal with Avison Young’s national hospitality group and its predecessor, Hotel Assets Group. While at Avison Young, he was involved in more than $3 billion in transactions of select-service and full-service hotel assets across the U.S.

Atlanta will continue to grow as a major production hub with the addition of BlueStar Studios, a 53-acre campus now under construction in nearby Forest Park, Ga., that will start operations in the summer of 2023.

The project represents a total investment of $180 million. Development will continue in phases through 2024. Atlanta-based Gala Media Capital, a division of private equity firm Peachtree Group, originated the financing for construction of phase one of the studio development.

The new film and TV production facility will offer 18 purpose-built stages with more than 600,000 square feet of space – ranging in size from 5,000 square feet to over 40,000 square feet each. Productions will have access to two intersecting 100GB fiber lines for supporting all technical needs, including cloud services and virtual as well as traditional production.

Stonehill PACE officials announced that the company originated its first commercial property assessed clean energy (C-PACE) financing in the state of Washington with a $16.3 million loan for the Cornus House, a new 199-unit multifamily project with 1,233 square feet of retail development.

“For eligible projects, C-PACE financing remains one of the more attractive venues to get a project over the finish line,” said Jared Schlosser, Stonehill’s senior vice president and head of Stonehill PACE. “The Cornus House is a great project in a strong market led by a savvy ownership group with 30-plus years of commercial real estate experience and a portfolio of more than 800 apartments. This C-PACE financing is the final piece to complete the financing puzzle.”

An expanded breadth of investment types has led Peachtree Hotel Group to rebrand as Peachtree Group to manage and control its multi-billion-dollar investment portfolio and direct investment strategies across its distinct operating and real estate divisions, including hospitality, commercial lending, residential development and capital markets.

As it more specifically relates to its ongoing hospitality investment strategy, Peachtree Group CEO Greg Friedman said evolving economic dynamics are influencing its approach. “The difficulty it creates on the acquisition front makes a solid case to focus on developments,” Friedman said. “You are less concerned about the short-term headwinds. Everything happening now is transitory; nothing is permanently changing the fundamentals of hospitality.”

Stonehill’s commercial real estate group, Stonehill CRE, has deployed approximately $200 million of capital through the origination and purchase of first mortgage loans since being launched in the second quarter of 2022. The company expects its commercial real estate group to deploy an additional $100 million in loan originations and other transactions by year’s end based upon deals in its pipeline. Stonehill CRE is targeting over $500 million in transactions for 2023