Atlanta-based investment firm Peachtree Group has passed the $2 billion mark in hotel development, with a focus on "core corporate" and suburban, limited-service hotels expanding into urban regions and larger projects, VP of investments Will Woodworth told BTN last month.
"Whereas 15 years ago a big deal for us would be a Home2 Suites in a college town, now we're in major urban cores building high-rise hotels," he said.
Peachtree's urban development has been built largely on taking advantage of Qualified Opportunity Zones, a U.S. Internal Revenue Service designation in which investors receive tax benefits for investing in economically distressed areas. Those benefits have allowed Peachtree to "invest in markets that might not be as economically feasible" that also are "places with significant corporate travel," Woodworth said.
In total, Peachtree has opened 10 hotels in designated QOZs and has another five under construction and three more in its pipeline. The properties have included an AC Hotel by Marriott in Sacramento, Calif., transformed from a former parking lot, and a Residence Inn by Marriott in San Antonio.
Peachtree also has been targeting leisure markets that can be supplemented with corporate business as well, such as a beachfront Embassy Suites set to open in Gulf Shores, Ala., this summer.
"The beauty of that for us is that we're able to provide a very family-friendly hotel model, while at the same time, it's a building that has meaningful meeting space so that in the off-season, when you don't have families going to beach, we can have group business booked into the hotel," Woodworth said. "Five months out from opening, we have a significant group calendar that's coming into place."
Dual-branded properties also are an attractive investment in the current market, he said. In August, Peachtree broke ground on a Marriott dual-branded Moxy and AC property in uptown Dallas, and the company last month opened a dual-branded TownePlace Suites and Fairfield Inn & Suites in Paris, Texas, a city that is seeing "ever-increasing business" demand, according to Peachtree hospitality management division president Vickie Callahan.
Woodworth said the majority of projects for Peachtree that have more than 150 rooms are being evaluated as dual-brand properties.
"We're increasing leaning into that," Woodworth said. "In urban areas, because of construction costs, density is key. You need to be able to maximize the amount of revenue-producing space you can on a site, and that means more rooms, and sometimes more rooms needs to be a differentiated product you can't achieve in one brand."
Woodworth said dual-branded properties can have additional benefits for guests as well. Extended-stay guests, for example, might want to handle their own meals with their in-room kitchens most nights, but the communal dining options of the other brand can give them "an elevated dining option without leaving the campus" on occasion, he said.