ATLANTA — Peachtree Group is widening its lending toolkit, sharpening its development strategy and preparing for a more fluid investment environment as hotel transactions evolve in 2026, according to Michael Ritz, executive vice president of investments. In a conversation with Hotel Management at last month's Hunter Conference, Ritz outlined how the firm is adapting to shifting market realities—from deferred capital investment and pressured sales to a growing need for flexible capital solutions.
One of Peachtree’s moves earlier this year was the addition of SBA lender First Western SBLC, which Ritz believes is an ideal fit for the company. “We see so much deal volume that we can’t do because we’re not an SBA lender,” he said. “It’s a natural fit—another menu option for borrowers—and we’re already seeing opportunities float straight into the SBA bucket without even trying.”
The SBA lending platform now sits fully inside the Peachtree Group, with hotel lending president Michael Harper working directly on its pipeline.
Market Stabilization Remains Elusive
Looking at the broader deal environment, Ritz said the industry continues to misunderstand what “normal” looks like. “Those years [2021-2022] were 35 percent above a typical transaction cycle,” he said. Compared with 2018–19, Ritz believes today’s deal flow is “not that far off,” but far less efficient.
In 2018–19, lenders and investors benefited from economic stability—easy underwriting, predictable loan pricing and consistent pro formas. “We haven’t regained that consistency yet,” he said. As a result, deals are more complex and take longer to complete.
Ritz sees two distinct seller categories: Those exiting voluntarily with profits in hand, and those facing pressured sales driven by lenders, aging holds or investor fatigue. Transactions for assets bought in 2018 are particularly strained. “Those were five-year deals,” he said. “People lost two years during the pandemic. Then debt costs spiked. Now interest rates are uncertain. It changes the entire exit math.”
As lenders and owners attempt to resolve these issues collaboratively, Ritz noted an unusual shift: “We’re seeing a lot of brokered pressured sales, which historically wasn’t the case. But lenders need assets off their balance sheets, and owners need resolution.”
CapEx Challenges
Deferred capital expenditures are now colliding with brand standards. Before COVID, the industry averaged roughly $7 billion annually in capex. That number fell dramatically in 2020 as operators drained reserves to stay current with lenders and franchise obligations.
“That capex doesn’t go away,” Ritz said. “Brands need reinvestment to protect guest experience. But many owners simply can’t fund it.”
The result: Rising listings and increased pressure on flag strategies. Conversion opportunities exist but are constrained by franchise agreements, construction inflation and rising labor costs.
Yet, Ritz said, the major brands are increasingly willing to compete for strong assets. “Marriott and Hilton will step up for Autograph, Tapestry, Curio—they’ll put key money in, ramp franchise fees, structure deals like development incentives. But only for the right assets.”
For Peachtree, ideal conversions involve minimal capex and immediate brand lift. Ritz cited a recent Choice-to-Hilton conversion requiring a little more than new signage and linens. “Those are unicorns,” he admitted. “But that’s where we get excited.”
Peachtree continues to develop nationwide, with recent projects completed in Maui and ongoing builds in Texas, where strong RevPAR tailwinds and manageable labor costs create favorable conditions.
This year, Peachtree will open a dual-brand AC/Moxy in Dallas, a Residence Inn in San Antonio and break ground on the firm’s largest-ever development: a 30‑story, 430‑key Embassy Suites/Tempo dual-brand in downtown Austin valued at roughly $240 million.
“We’re cautious about development risk right now,” Ritz said. “We build where the equation works—high rate growth plus labor efficiency.”