Peachtree Group has announced the launch of the $250 million Peachtree Special Situations Fund, designed to unlock value in underperforming hotel and commercial real estate assets affected by market illiquidity. This initiative comes at a time when nearly $1 trillion in loans are set to mature in 2025, alongside significant refinancing needs in the hotel sector.
Many real estate owners who financed properties during the zero-interest-rate era are now grappling with capital gaps as interest rates remain high and liquidity remains limited. Peachtree’s strategy provides creative, downside-protected capital solutions to reposition these assets and unlock their value. The Special Situations Fund targets investments that fall between value-add and opportunistic strategies, striking a balance between the potential for upside and protection against downside risks.
The core strategies of the fund include:
- Off-market acquisitions: Identifying underperforming or mispriced hotels, as well as various commercial real estate sectors such as multifamily properties, student housing, and self-storage, for repositioning and stabilization.
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Preferred and hybrid equity solutions: Offering flexible capital to sponsors during acquisitions, development, or refinancing, with structures designed to protect the investment basis and enhance current yields.
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Distressed purchases from lenders: Acquiring assets directly from banks through deeds-in-lieu or post-foreclosure deals, often at discounts to outstanding loans and below replacement costs.
Peachtree’s fully integrated platform encompasses direct lending, CPACE financing, development, acquisitions, and capital markets, providing a unique perspective on evolving market dynamics. Strong relationships with community and regional banks, as well as other stakeholders, enable Peachtree to identify high-value opportunities early, before they are made available to the broader market.
The fund will focus on nationwide opportunities, particularly in markets with strong demand fundamentals and recent price adjustments, including Texas, Florida, and California. Peachtree plans to have its first close within the next 60 to 90 days, to complete the final close within 18 months of the initial closing.
KEY QUOTES:
“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. 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.”
“This fund is about capitalizing on dislocation, not chaos. We’re targeting high-quality assets not distressed by systematic factors but by capital structure, and we’re doing it with the speed, creativity and certainty of execution that have defined Peachtree’s reputation for more than a decade.”
“We’re the first call when a sponsor or lender needs a fast, reliable solution. Speed and surety of close are critical in this environment, especially when dealing with complex capital stacks and distressed notes.”
Greg Friedman, managing principal and CEO of Peachtree
