Hotel investment and managing platform Peachtree Hotel Group is adding 10 hotels to its portfolio of select-service properties nationwide. Four hotels are under contract for acquisition and are expected to close within the next 60 days. The company also has six additional properties in various stages of development. PHG’s management arm will operate all 10 hotels upon consummation of the transactions/openings. Aggregate investment across the 10 hotels is approximately $183 million.
“Although the outlook for the hotel industry is positive over the next several years, we’re seeing more motivated owners selling both non-core and assets requiring significant capital reinvestment due to the recent volatility in the capital markets coupled with tightening debt markets,” said Brian Waldman, SVP of investments at PHG. “With RevPAR at or near its peak, we continue to be very selective about the opportunities we pursue and target hotels that can benefit from either improved management or are in need of capital investments. This plays well to our strengths as both owners and operators.”
“This scenario creates opportunities for savvy owner/operators,” Waldman said. “Although transaction levels were low in the first quarter, we anticipate an increase in acquisition volume through both on and off market deals. Impacting transaction volume will be a major wave of PIPs on the near horizon and billions of dollars of CMBS loans coming due in the next few years. We have considerable ‘dry powder’ to continue to acquire both individual properties and portfolios, as well as for development.”
The four properties under contract for acquisition, representing nearly 600 rooms, include two Hampton Inns, an Aloft and a DoubleTree conversion opportunity. Geographically, the investment footprint spans from the Southeast to the Midwest.
The five hotels under development represent nearly 700 rooms across four states and include Marriott, Hilton, IHG and Starwood brand affiliations.
“Our prolific pipeline is a testament to our platform of aggressive, but prudent, expansion in select-service hotels within secondary and tertiary markets,” said Jatin Desai, CIO at PHG. “We continue to seek hotels that can benefit from strategic cash infusions and/or better operating practices, as well as development opportunities in markets with multiple demand generators, limited new supply and a positive business environment.”
“To support our aggressive growth plans, we have added greater depth to our bench on the operations and finance sides,” said Greg Friedman, CEO of PHG. “We will continue to scale our platform to provide superior services for our investors, guests and team members as we expand.”