COMMERCIAL REAL ESTATE lender Stonehill expects to deploy around $1.25 billion in 2021, a 74 percent increase from last year, according to the company. It’s parent company, Peachtree Hotel Group, has acquired more than $1 billion in stressed and distressed real estate assets since June 2020.
Stonehill has provided loans worth $612 million across 64 transactions year-to-date in first mortgage permanent and construction loans, bridge, and mezzanine loans and hotel investments, it said in a statement.
"These structured transactions are a reflection of our ability to provide creative and cost-efficient capital solutions that meet our sponsors' unique needs. Our experience originating complex transactions as well as the quickness and certainty of execution differentiates us in the market,” said Mat Crosswy, Stonehill principal. "The tide is turning, and we have experienced an increase in activity from hotel owners and investors as forbearance periods are ending and traditional lenders becoming less flexible than they were a year ago. With the industry in recovery mode, hotel owners are looking for financing options to ensure their properties and portfolios have an optimal capital stack to see them through to a normalized operating environment."
Crosswy added that Stonehill prides itself on working with owners to find financial solutions that work for all parties involved.
Peachtree heads Jatin Desai and Mitul Patel are principals of Stonehill and members of the company’s investment committee. Stonehill also has an affiliate, Stonehill PACE, that offers commercial property assessed clean energy (CPACE) financing.
According to a survey conducted in late 2020 by the American Hotel & Lodging Association, hotel owners were in danger of foreclosure by their commercial real estate debt lenders. However, government support and ongoing help from banks have kept hotel owners from suffering even steeper losses. But much of this support will come to an end soon, the statement added.
In January, Stonehill announced it had closed on $100 million Commercial Property Assessed Clean Energy loans for nine properties during the fourth quarter of 2020 and expected to close on an additional $80 million in CPACE financing within 90 days of that statement.
Peachtree’s acquisition of the $1 billion in stressed and distressed is part of a strategy devised in response to the economic disruption brought on by the pandemic. The company said it has “acquired, operated and disposed of equity interests during this period and invested in preferred equity, debt or debt-like positions in primarily premium-branded, limited- and select-service hotels.”
“We have capitalized on the dislocation created by the pandemic with investments in assets at a lower cost basis than pre-pandemic pricing. Our strategy of opportunistically pivoting as the markets change allows us to capitalize on investments during any cycle,” said Greg Friedman, Peachtree’s CEO. “We have been able to draw on our team’s deep experience, longstanding relationships and ability to navigate changing dynamics to source investment opportunities. The current landscape has potentially widened our opportunities for attractive undercapitalized assets and assets within the hospitality sector experiencing increasing demand.”
