PROVO, Utah – PEG Companies [PEG], a vertically integrated commercial real estate leader across North America, today unveiled its newest multifamily brand. Developed specifically for the PEG Extended Stay Conversion Fund, L.P. [PEG ESCF], the AVIA Apartments brand represents a unique strategy focused on the acquisition and conversion of discounted extended stay hotels into Class B multifamily housing.
“The AVIA Apartments brand plays to all of PEG’s strengths while filling a growing need. Right now, we’re seeing a major housing affordability crisis across the United States, and we are perfectly positioned to address that crisis in a way that maximizes returns for our investors,” said Rob Fetzer, Chief Operating Officer at PEG.
Structured as a value-add fund managed by PEG Capital Partners [PCP], the investment management arm of PEG Companies, PEG ESCF has an initial closing date of December 1, 2020. The fund is currently targeting to raise $150M in commitments.
“We liked the creative concept when we acquired our first 11 extended stay properties back in 2018, and we believe the strategy makes even more sense in today’s current economic climate,” said PEG Chief Executive Officer Cameron Gunter. “Opportunities like this do not present themselves often, as we are buying one of the hardest hit asset classes during the COVID-19 pandemic and converting them into one of the most stable asset classes over the same time period.”
While the strategy continues to capture interest among investment groups across the country, with some even attempting to duplicate it, PEG remains one of only a handful of firms able to fully execute the entire process, from the initial acquisition to the ultimate disposition of the properties. With experienced teams that specialize in operating the acquired extended stay hotels, re-entitling, converting, and operating the new multifamily properties, PEG is now executing this strategy in several locations. The firm has four acquisitions currently under contract in Orlando, Florida; Overland Park, Kansas; Austin, Texas; and Buffalo, New York, with construction on track to commence before the year is over.
“We are prepared to operate the AVIA Apartments brand at the highest of levels. With new life and new energy, these properties stand to welcome residents to a vibrant and affordable place to call ‘home,’” said PPG President Debra Spohn.
“Many of the newly converted AVIA Apartments will provide much-needed attainable housing for local workforces in these areas, and we are excited to begin leasing units. In most cases, county and other local advocates have been very helpful and supportive of what we are accomplishing, and we hope to be great partners to the communities with which we are working,” added Soren Halladay, Chief Investment Officer at PEG.
PEG has scheduled a live webinar on January 26th at 11:00AM MDT during which fund operators will explain the structure and conversion strategy in greater depth.