Peachtree Group Moving Forward With New Hotel At Atlantic Station
A prolific commercial real estate developer is adding to its hotel empire in Midtown Atlanta.
Peachtree Group, formerly known as Peachtree Hotel Group, plans to build a seven-story Springhill Suites hotel at 301 17th St. in Atlantic Station, according to a permit application filed with the city of Atlanta.
The site is currently a hole in the ground made by the underground parking deck for the mixed-use project and would rise between the 271 17th St. office building and the Twelve Midtown hotel in Atlantic Station.
Peachtree would construct six floors of hotel rooms over one floor of “mixed occupancy” with three floors of below-ground parking, according to the application. It would be the first of two buildings on the parcel.
Peachtree CEO Greg Friedman declined to comment.
“We will hold off. Project is still in the works right now,” Friedman told Bisnow in an email.
The project may be a revival of Peachtree’s plans from 2019, when it was pursuing a dual-branded, two-building hotel on the spot, What Now Atlanta reported at the time. It filed to build a Springhill Suites by Marriott and a Tapestry Collection by Hilton on the 1-acre site it purchased in 2018 for $3.75M.
If Peachtree moves forward, the Springhill Suites would be the latest in a flood of new hotel rooms planned for Metro Atlanta.
Atlanta had the second-largest hotel construction pipeline of any city in the U.S. in the third quarter, with 139 projects making up more than 17,800 rooms, according to Lodging Econometrics. Dallas had the largest pipeline of new hotels, with 174 projects encompassing more than 20,600 new rooms. Los Angeles was third with 118 projects and 19,000 rooms.
Despite troubling economic signals and aggressive interest rate hikes by the Federal Reserve, the hotel industry has been flourishing in many cities after restrictions due to the pandemic loosened, Colliers Senior Vice President Helen Zaver said. Zaver is part of Collier’s national hospitality group based in Atlanta.
With business travel and group meetings gaining traction, Atlanta hotels' average daily room rates increased $10 between January and June of this year to $72, according to a report from Colliers.
“Right now, hotels are doing quite well,” Zaver said.
Debra Cannon, the director at Georgia State University’s Cecil B. Day School of Hospitality and an associate professor at GSU, told Bisnow that brands with suites like Springhill cater to the “bleisure” crowd.
“We're seeing, of course, a continuation that started in Covid: business and leisure coming together,” Cannon said. "So when you think about a suite hotel, it is a very good option to combine leisure and business."
While overbuilding is always a concern, Cannon said modern hoteliers cut risk by being very focused on data and fundamentals, which drives where they decide to build new hotel locations.
“Our industry is more data-driven now than ever, and it will continue to be more data-driven and analytical,” she said. "I think they realize that the business is going to be there. Atlanta is going to continue to grow."
Zaver said Midtown is a safe bet for new hotels, given the corporate growth taking shape with Google and Microsoft. But at the same time, rising borrowing costs may delay or even scrap some of the hotels in the pipeline.
“Right now, with the financial markets in such a flux, a lot of projects are on hold right now,” Zaver said. “But Midtown is still on fire. It’s where everyone wants to be.”
