Peachtree posts record development year
Hilton Garden Inn in Pensacola will open in Q1 2023.
Private equity firm Peachtree Group’s development division, Peachtree Hospitality Development, is on track for a record year in the hotel market.
This year the firm has helped to open three select-service hotels in the US, with another one to imminently follow.
Construction commencement
Coming up, the company will break ground this year on 11 primarily select-service hotels across the US. In total, Peachtree will add more than 1,500 rooms to its portfolio through these developments.
The 11 groundbreaking sites are expected to begin opening in late 2023 and into 2024. They include: a 118-room SpringHill Suites in Lexington, Kentucky; a 112-key Residence Inn in Plainfield, Indiana; a 122-room Home2 Suites by Hilton in Ashburn, Virginia; a Tempo by Hilton and SpringHill Suites bringing 274 rooms to Atlanta, Georgia; and a 98-key Homewood Suites by Hilton in Jackson, Tennessee.
Completing the list are a 151-room Curio by Hilton in Paso Robles, California; a 120-key TownePlace Suites by Marriott in Palmdale, California; a 114 guestroom Hilton Garden Inn in Buford, Georgia; a Homewood Suites by Hilton bringing 123 rooms to Boca Raton, Florida; a 136-key Hampton Inn & Suites by Hilton in Maui, Hawaii; and a 257-room Embassy Suites by Hilton in Gulf Shores, Florida.
Opportunity zones
Peachtree is also actively building new hotels in opportunity zones. Created under the USA’s Tax Cuts and Jobs Act of 2017, the purpose of opportunity zones is to spur economic growth and create jobs in low-income communities by incentivising investment in roughly 8,700 regions across the country.
The three opportunity zone projects in Peachtree’s pipeline are Hampton Inn and Suites in Maui, which will be only the second-branded hotel in the Maui airport area and the sites in Paso Robles, California and Plainfield, Indiana.
Brian Waldman, Peachtree’s CIO, commented: “While not every opportunity zone needs a hotel, these zones are typically in downtown markets, near airports, near industrial parks, near universities, places that hotels have historically done well. Investing in these areas positively impacts low-income communities, as they can boost economic growth and job creation.
“Hotel investments are poised to be the most resilient commercial real estate asset class in today’s macroeconomic climate, and we expect hotels to perform well for the foreseeable future. As new hotels outperform older assets, we expect to continue to be active in our development program.”
Accommodation achievements
Peachtree’s COO and managing principal Mitul Patel said: “While construction starts have been slowed by the pandemic and supply chain disruptions, we have successfully navigated these issues and remain on track to deliver the most hotel openings and groundbreakings in our history.”
According to professional services partnership Ernst and Young: “The rise of select-service hotels is indicative of the shifting preferences of travellers and hoteliers. Due to the segment’s higher operating margins and decreased construction costs, select-service is expected to remain favoured by hotel investors and developers seeking a hotel product that addresses the value and convenience preferences of today’s traveller.”
Already open
Peachtree’s 2022 openings include a 95-room Homewood Suites by Hilton in Destin, Florida; a 134-key Homewood Suites by Hilton in Louisville, Kentucky; and a 157-room SpringHill Suites in Baltimore, Maryland.
The developer expects the 132-room Hilton Garden Inn in Florence, Kentucky, to open later this year, as well as two hotels in Florida, Hilton Garden Inn in Pensacola and Hampton Inn Delray Beach, during the first three months of 2023.
Patrick Short, president of Peachtree Hospitality Management, a division of Peachtree and operator of the properties, said: “These hotels are already performing extremely well, achieving among the highest performance within their competitive sets in their respective markets. These results are also a testament to the popularity of select-service hotels, which address today’s traveller’s value and convenience preferences.”
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