The STOP-AND-GO economy of 2021 hasn’t slowed the progress of Atlanta’s Peachtree Hotel Group. The company has amassed a record $2 billion in total capitalization through 140 transactions, including acquisitions, developments, loans and hotel investments.
Representatives of the company, led by partners Bimal Patel, Hiten Suraj and Rupesh Patel, discussed record year at the Americas Lodging Investment Summit in Los Angeles last week.
“We are extremely pleased to have completed an extraordinary year of investment activity,” said Greg Friedman, CEO of Peachtree. “Our strategy of investing top-down in the capital stack and pivoting opportunistically as markets move allows us to capitalize on investments through any economic cycle. 2021 has illustrated our capability, and we expect 2022 to be another strong year on the investment side. »
Peachtree acquired nine hotels over the past year for approximately $300 million, bringing the company’s portfolio of owned-and-managed hotels to 76 with 9,351 rooms nationwide. Acquisitions made include:
- AC Hotel by Marriott in Aventura, Florida, 233 rooms
- Aloft Miami Aventura in Aventura, FL, 207 rooms
- Embassy Suites by Hilton in Kennesaw, GA, 192 rooms
- Aloft Nashville Franklin in Franklin, TN, 143 rooms
- Cambria Hotel in Rockville, Maryland, 140 rooms
- SpringHill Suites by Marriott in Annapolis, Maryland, 120 rooms
- Hilton Garden Inn in Granbury, TX, 106 rooms
- Hampton Inn in Paso Robles, CA, 81 rooms
- La Bellasera Hotel & Suites in Paso Robles, CA, 60 rooms
“The acquisitions we made were really exciting. I think they are great additions to our portfolio,” said Brian Waldman, Peachtree’s executive vice president for investments in an interview with ALIS. “These are select services, limited services, hotels, fairly representative of what we have purchased over the years.”
To take notes
Another major source of capital for the company was through its subsidiary Stonehill, a commercial real estate direct lender. The company deployed $770 million across 23 issued loans, which included construction investments, bridges and preferred stock.
“There is currently a huge void in the construction loan market. We’re really excited about all the projects,” Waldman said.
Through its subsidiary Stonehill PACE, Stonehill has completed 17 CPACE (Commercial Property Assessed Clean Energy) financings with a total capitalization of $276 million, making it one of the largest on-balance sheet CPACE lenders in the United States. . Also, in a particularly successful strategy in the economic turmoil. of the pandemic, Stonehill acquired 90 senior notes, mostly backed by accommodation assets, with a total market capitalization of approximately $600 million.
“For the tickets that we’ve purchased, most of the time the main plan is to work with the borrowers to restructure them to give them a runway to live on and fight another day,” Waldman said. “A lot of these borrowers were in default when we bought the tickets and we worked with the idea of giving them a bit of a living room to fight another day with the idea that they will be able to make their way. pass, through a subsequent sale or refinancing.”
However, as the pandemic subsides, Waldman said the company will likely turn to other investment vehicles.
“While investment in ticket purchases has been significant over the past two years, we plan to deploy more of our capital in opportunistic acquisitions, substantive developments and loans within the limited-service hotel chains and limited-service as part of the current cycle of hospitality recovery,” he said. noted.
Additionally, in 2021, the company began construction of five hotels with approximately 700 rooms in California, Florida and Kentucky. The company has a pipeline of approximately 20 additional hotel developments in various stages of planning or construction.
“With the end of the global pandemic expected to end this year and the sustained economic recovery boosting hospitality fundamentals, we believe the hospitality industry remains among the best real estate classes to invest in,” Waldman said. . “So what are we going to do with [the $2 billion in capital?] We will continue to own and manage assets and hopefully maintain momentum and exceed it in 2022.”