Peachtree Group Provides $43M Loan in Fort Lauderdale Hotel Recap

Driftwood Capital has secured $43 million of bridge financing as part of the recapitalization of a dual-branded Fort Lauderdale hotel, Commercial Observer can first report. 

Peachtree Group originated the three-year, floating-rate loan with extension options on Driftwood’s Home2 Suites/Tru by Hilton Fort Lauderdale Downtown property. Driftwood acquired the site at 315-333 NW First Avenue in 2016 for an undisclosed purchase price and developed the property, which opened in November 2020.

Jared Schlosser, Peachtree Group’s senior vice president, said the timing of the hotels’ opening during the height of the COVID-19 pandemic meant more time was needed for the sponsorship to ramp up and achieve its business goals. 

Schlosser noted that the hotels stand to benefit from the property’s proximity to  the Broward County Convention Center, which is undergoing a $1.3 billion expansion project, and Port Everglades, one of the world’s busiest cruise ports. The site is also near a planned 835,000-square-foot, master-planned, mixed-use development called FAT Village that Hines is developing.

“Once the Hines development and some of the other nearby developments come online in the next year or two, this hotel is really going to prosper,” Schlosser said. “It’s already ramping pretty well, but the area around it is really going to transition over the next 24 months.”

The Fort Lauderdale Home2 Suites/Tru by Hilton property is within a federally designated Opportunity Zone in the city’s Flagler Village section. Driftwood and investment partner Merrimac Ventures closed a $24 million deal through the Opportunity Zone program in late 2019 for the hotel development, The Real Deal reported at the time, 

Bank OZK supplied a $28.4 million construction loan for the hotel project in August 2018. 

“As hotel fundamentals remain strong throughout South Florida’s urban core, we anticipate continued demand throughout the property as proximity to Fort Lauderdale’s Brightline Station and development of the mixed-use FAT Village act as key market drivers for extended-stay or short-term accommodations,” Daniel Katz, vice president, asset management at Driftwood, said in a statement,

Andrew Coen can be reached at acoen@commercialobserver.com