Your web browser is out of date. Update your browser for more security, speed and the best experience on this site.

Update your browser
Posted Apr 22, 2024

A CEO’s perspective on building a billion-dollar firm

Blog A conversation with Greg Friedman 2x

In a recent episode of The Distribution by Juniper Square, Brandon Sedloff spoke with Greg Friedman, co-founder, managing principal, and CEO of Peachtree Group. Founded in 2007, the Atlanta-based firm now has $3.4 billion in capital under management and $9.7 billion in real estate asset value.

Here are four key takeaways from the interview.

Work like your fiduciary responsibilities were to family

Friedman grew up in the commercial real estate business. As he explained, his family “did a lot of lending to hotel owners. So I personally grew up around the business–both on the credit and debit side, as well as the equity side across hotels.”

After graduating from the University of Texas, Friedman took a job with GMAC commercial mortgage within their hotel finance group–his professional entree into commercial real estate. In 2007, he and his friends Jatin Desai and Mitul Patel found two commercial properties to invest in Pell City, Alabama–a Hampton Inn and a Holiday Inn Express. So began Peachtree Group.

With an early investor base consisting primarily of family and close friends, Friedman learned quickly the implication of “being a fiduciary to your grandfather." He worked “probably 20 times harder” to ensure he could deliver good news to his investors, noting that Thanksgiving dinner can be particularly uncomfortable when investments are underperforming. Even as Peachtree Group has grown, Friedman remembers those early years and maintains his strong focus on performance and communication.

Keep an eye out for opportunities, internally and externally

With the hotels doing well, Friedman was able to keep his eyes peeled for new opportunities on the heels of the Great Recession. By the end of 2008, their focus had shifted from just investing in hotels to buying distressed debt from regional banks, community banks, and even the FDIC. “Our business was exploding because pretty much all the institutional lenders were pulling out of the market, and regional banks, community banks, were all benefiting.”

In addition to making new investments in different property types, Friedman also decided to internalize the business's operational side. Instead of continuing their dependence on third-party operators to run the eight hotels they owned, Peachtree Group set up their own development and operations companies to handle construction and renovation projects for their properties.

Expand beyond the familiar

By 2012, the business had become more than a family office, and Friedman saw an opportunity to move into direct lending. “We shifted our debt buying business to doing direct lending to groups that needed first mortgage loans to go out and refinance or acquire new hotel assets as well as other commercial real estate assets.”

In 2014, Peachtree Group reorganized its business again. Friedman saw how his firm had evolved into a vertically integrated private equity firm and how that vertical integration enabled them to operate, develop, manage, and finance multiple businesses and create, drive, and optimize investments.

Invest in inefficiency

“At our core, we're looking for inefficiencies in the marketplace that we can take advantage of to drive outsized returns relative to the risks we're taking,” said Friedman. In addition to the hotel market, where “there's an underallocation of capital, relative to its size,” Peachtree Group has also made investments outside of real estate in markets where inefficiency creates opportunity—film finance, for instance.

Interested in learning more from the conversation with Greg Friedman? Watch the full interview or listen to this episode on Spotify or Apple Podcasts.