Peachtree Group wins $42 million bid for suburban Atlanta hotel

Distress has hit the lodging sector of metro Atlanta’s commercial real estate landscape, resulting in a foreclosure sale at a high-end hotel brand in the affluent suburban Alpharetta market.

The 119-key Hamilton Hotel, part of Hilton’s Curio Collection, was recently sold to Atlanta-based Peachtree Group in a credit auction, the Atlanta Business Chronicle reported.

Property records show a winning bid of $42 million (nearly $353,000 per key) on July 2 by the company, which had loaned $40 million to hotel developer Mayfair Street Partners.

The lender is acquiring a property at 35 Milton Avenue, just steps from downtown Alpharetta in the historic downtown area of ​​the city of 70,000. The property includes an entertainment venue and the Sorella Vicina restaurant, among other tenants that complement the hotel.

The loan to the hotel developer was due to mature in January, and the foreclosure came after a long period of trying to overcome financial difficulties, the outlet reported.

“Throughout the term of the loan, we have worked constructively with the borrower and have now taken possession of the hotel through foreclosure,” Peachtree Group said in a statement.

Office landlords have been hit hard by weak demand from the remote working trend, combined with rising borrowing costs from rising interest rates. The hospitality sector is also suffering, with older hotels in need of renovation typically at the forefront.

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The Hamilton Hotel has fallen into default despite its relative newness, having been commissioned in 2021 in place of a series of low-rise retail stores. The hotel was valued at $21.3 million in 2022, but its value has fallen about 30% this year to $16.2 million, according to the Fulton County Board of Assessors.