Why I believe Phoenix American Hospitality Hotel REIT II is a good investment

My name is Perch Nelson, CEO of Phoenix American Hospitality. We are experienced hotel investors who are proud to say that we have launched Phoenix REIT II. We are aiming to deliver a 10% annualized return, distributed monthly by following the same investment process as our first REIT. We are aiming for an IRR of  over 20% and a return of capital in 2-3 years when we sell our portfolio of hotels. 

I am an investor in both REITs as are many of our team. This is our eighth offering, our second direct to individual investors.

Our first REIT has cemented us as industry leaders among hotel investors. We invested in Premium Business Select Hotels and although we were aiming for an 8% annualized return, we have been delivering a 12% annualized return, distributed monthly to our investors since 10/31/23. 

These returns have resulted in a happy group as evidenced by—44% of investors in our first REIT chose to re-invest. 

We believe we can replicate much of this success using the same rigorous investment process for each hotel investment. Our investment process is not the only key to our success. Rather than purchasing pools of property and outsourcing operations, we are owners and operators of our hotels. We are on-site, optimizing both revenue and operations in pursuit of profit.

With those profits, we can distribute monthly income, and those higher profits drive the value of the hotel investment when we sell our portfolio of hotels, aiming to deliver above our goal on growth.

 Phoenix American Hospitality reviews  each property we are interested in, looking for the following criteria: 

  1. Premium Business Select Hotels
    1. This means that they don’t have large, cost intensive amenities like full-service restaurants and are high-quality hotels. 
  2. Location in a mid-sized urban area. 
  3. Proximity to multiple reasons to stay in a hotel from businesses to hospitals, universities, and event venues. 
  4. Generating revenue and are out-performing their competition.
  5. Strong national brands only Marriott and Hiton. 
  6. Price below replacement cost.

Once we purchase hotels, our strategy is straightforward: we optimize operations by trimming organizational excess, seeking to increase revenue and generate profits which we distribute monthly, culminating in the anticipated sale of our properties in 2-3 years. 

Due to the benefits inherent to Premium Business Select Hotels, an investment in Phoenix American Hospitality has historically been a source of consistent monthly income and long-term growth. We believe that REIT investing can be a boon to your monthly income because hotels are dynamic assets that can act as an inflation fighter. 

Unlike long-term rental properties such as apartments or offices which are locked into leases, hotels are able to take advantage of dynamic pricing and remain competitive in diverse contexts. This means that room prices can be changed, even hourly in response to demand. For example, when the big game or concert is in town, or it is parents weekend, our room rates can go up based on demand. 

How is this price flexibility possible? We pay our lean, high-quality staff well, leading to lower employee turnover rates; we only invest in Premium Business Select Hotels with limited amenities, featuring lower operational overhead cost compared to full service resorts; and we only choose hotels with a history of generating positive cash flow. 

Investing in hotel real estate has been a consistent source of income for myself, much of the Phoenix team, and our investors. If you would like to learn about our offering, please visit our offering page. If you would like to speak to one of our staff Dallas-based representatives, please click here and schedule an appointment. 

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