As the industry looks to recover from the COVID-19 pandemic, private equity firms and lenders are sharing their strategies in what can be described as a complex transaction landscape.
Peachtree Hotel Group has acquired more than $1 billion in stressed and distressed real estate assets since June 2020. Company executives said they have focused on investing in opportunistic real estate in distressed, under-capitalized or underperforming hospitality assets throughout the U.S. because of the disruption in the economic environment brought on by the pandemic.
“We have capitalized on the dislocation created by the pandemic with investments in assets at a lower cost basis than pre-pandemic pricing,” said Peachtree CEO Greg Friedman. “Our strategy of opportunistically pivoting as the markets change allows us to capitalize on investments during any cycle.”
The company acquired, operated and disposed of equity interests during this period and invested in preferred equity, debt or debt-like positions in primarily premium-branded and limited- and select-service hotels.
Meanwhile, Stonehill, a commercial real estate direct lender, announced it deployed $612 million across 64 transactions year to date. The company expects to deploy approximately $1.25 billion during 2021, increasing 74 percent from 2020. The transactions include first mortgage permanent and construction loans; bridge, and mezzanine loans; and hotel investments. The company also has an affiliate, Stonehill PACE, that offers commercial property assessed clean energy financing. Stonehill as a senior lender originates loans across the capital structure for acquisitions, construction, recapitalizations, refinancing, and renovations.
“These structured transactions are a reflection of our ability to provide creative and cost-efficient capital solutions that meet our sponsors’ unique needs,” said Mat Crosswy, Stonehill principal. “Our experience originating complex transactions as well as the quickness and certainty of execution differentiates us in the market.”