Peachtree Group has completed the inaugural investment through its Peachtree Special Situations Fund I, LP, to be used for the acquisition and repositioning of the DoubleTree Suites Detroit Downtown Fort Shelby.
The newly created fund will provide approximately $14.5 million in preferred equity as part of a $42 million capitalization for the 203-room hotel, which will be converted to an Embassy Suites by Hilton. Planned improvements include a comprehensive property renovation, operational enhancements and a brand conversion.
Peachtree Special Situations Fund I, LP has a target size of $250 million and is the firm's fourth dedicated equity fund. According to the Atlanta, Ga.-based company, the strategy builds on its existing investment platform across hospitality and other commercial real estate sectors.
“This investment reflects how we're approaching today's market,” Greg Friedman, managing principal and CEO of Peachtree Group, said in a statement. “By providing flexible capital solutions, we can help sponsors execute attractive business plans while maintaining a disciplined focus on downside protection and positive, risk-adjusted returns.”
Peachtree further noted the fund is structured to pursue preferred, structured and common equity investments, as well as special situations such as REO acquisitions, deed-in-lieu transactions and discounted note purchases. While the strategy is flexible across commercial real estate sectors, the company expects the fund to focus primarily on hospitality investments.