Peachtree Hotel Group has embarked in a fast-growth strategy that has been 24 months in the making and will continue in 2013.
Following sequential hotel acquisitions, management changes and ownership group development by yearend 2012, Peachtree completed 31 acquisitions over the past 24 months including most recently the portfolio purchase of two nonperforming first-mortgage notes.
New acquisitions—including the recent addition of Hilton Garden Inn, a 135-room hotel in Virginia, and Best Western, a 60-room property in Florida—are part of a long-term company effort to increase its third-party management portfolio, executives said.
Peachtree CEO Greg Friedman says the company will expand its third-party management division to “as much as 25% within the next three to five years,” because it is not seen as a sideline business.
Peachtree executives said they plan to maintain “one of the industry’s most aggressive acquisition paces,” at one to three hotels per month, for at least the next 12 to 18 months. According to Friedman, it has quadrupled its portfolio over the past two years.
Peachtree is purchasing both hotel real estate and discounted first-mortgage notes.
To support the growth, the firm is also adding key asset management, operations, accounting and marketing support staff.
Since its inception Peachtree has acquired or developed more than $250 million of hotel properties and first-mortgage notes. And while it has a diversified ownership and third-party management portfolio in most major markets, Friedman said, the group favors the eastern half of the United States.
Given the cyclical nature of the hotel industry, he added, Peachtree’s aggressive growth strategy and engagement in all aspects of the industry will enable it to “re-enter the development phase” sooner and complete the four development projects and two projects under preliminary review that are currently in its pipeline.