ATLANTA—Stonehill Strategic Capital, an affiliate of Peachtree Hotel Group, has ramped up its lending platform and plans to deploy approximately $200 million, primarily in mezzanine and bridge loans for hotel assets and development over the next 12 months.
The company targets the $1 million to $10 million loan range for mezzanine loans and $3 million to $20 million for bridge financing.
“Hospitality and lodging fundamentals have continued to strengthen, driving a surge in transaction activity,” stated Mat Crosswy, president of SSC. “However, buyers are facing a shortfall in the capital stack due to banks’ reluctance and conservative nature when underwriting hospitality credits. SSC realizes that every deal is unique and can provide potential borrowers an edge with higher leverage loans coupled with creativity, timeliness and flexibility in their execution, when speed and certainty of close may matter most.”
SSC Principal Jatin Desai said that SSC’s bridge and mezz loans will complete the capital stack up to 85% loan-to-value, with two- to five-year terms. SSC foresees the bulk of its lending going toward acquisitions and refinancings, with some limited new development, preferably in premium brands in the select-service and extended-stay categories throughout the United States.
“From a financing perspective, we are optimistic that the demand for debt will continue to be robust in 2014 given the on-going normalization of the capital and transaction markets,” stated Greg Friedman, SSC principal.
Since launching in third-quarter 2013, Stonehill Strategic Capital closed and funded five transactions. In addition to providing loan financing, Stonehill Strategic Capital also purchases first mortgage notes. The company, via affiliates, purchased eight first mortgage notes in 2013.