New Investment Vehicle Targets Hospitality Real Estate with an Aim for Generational Wealth
IRVINE, Calif.–(BUSINESS WIRE)–Pacific Hospitality Group (PHG), a prominent name in the hospitality sector, has unveiled the PHG Evergreen Fund, an innovative investment vehicle unique within the hospitality real estate sector. This is in advance of The Lodging Conference, one of the world’s premier hotel industry events. Over the past three and a half decades, PHG has consistently outperformed industry benchmarks, averaging an 11.6% net annual cash on cash return and a 25% net annual total return for its investors—more than doubling industry norms. Historically, PHG’s strategy gravitated towards long term holds of single asset hotel investments. The introduction of the PHG Evergreen Fund heralds a transformative approach, applying that long term strategy through a permanent capital fund vehicle.
“After 35 years of prosperous hotel investments, we’re venturing into the next phase of our investment strategy,” said Tim Busch, Founder and CEO of Pacific Hospitality Group. “Garrett, my son, as my successor, plays a pivotal role in broadening our investment strategy and propelling the growth of our company.”
Under Garrett Busch’s leadership as President of PHG, there has been a laser focus on positioning the company for growth and investing in enhancing every facet of the enterprise. “Our identity as owner-operators has been instrumental in our successful investment journey,” said Garrett Busch. “This foundation, combined with our commitment to our team members, communities, and investors, positions us as long-term stakeholders. The Evergreen Fund will further amplify our capacity to deliver superior risk adjusted returns while also propelling the growth of the company.”
PHG has set an ambitious initial target of securing $250 million in commitments to seed the Evergreen Fund. The fund is slated for an initial closing on November 15th this year. The company will continue its strategy of investing in opportunistic markets with high growth potentials with a focus on the sunbelt states – California, Arizona, Utah, Texas, Tennessee, Florida, Georgia and The Carolinas – as well as Colorado, Hawaii and Washington.
Pouya Honari, head of investments at Pacific Hospitality Group and the architect of the new fund, adds, “The PHG Evergreen Fund encapsulates our 35+ year old investment strategy into a new and dynamic vehicle. It mitigates investor risk by diversifying across a portfolio rather than single asset investments, incorporates liquidity provisions, and upholds the tax advantages and return structures our investors have valued for decades.”
An evergreen fund is a continuously operating investment structure without a set maturity date, allowing investors flexibility to enter at different times during the life of the fund. Primarily used for investments in sectors like private equity, venture capital, and real estate, these funds are characterized by their fluid capital structure and long-term investment strategies in illiquid assets. While they provide periodic redemption opportunities, fund managers retain the right to modify these for the fund’s overall stability. Their primary objective is to deliver sustained returns over extended periods, rather than rapid profit turnovers. In contrast, a traditional close-ended real estate fund raises capital through an initial offering to invest in real estate assets for a fixed period. Unlike open-ended evergreen funds, it has a predetermined lifespan, typically ranging from 7 to 10 years, which includes an acquisition phase followed by a holding and, eventually, a divestment phase. Once the capital is raised, no additional funds are accepted, and investors are generally not able to redeem their shares until the fund’s assets are sold and the fund is liquidated.
Garrett Busch added, “We are excited about this new investment initiative and are seeding the fund as an anchor investor.”
For more information about the PHG Evergreen Fund and to explore opportunities for interviews and exclusive insights during The Lodging Conference, please contact Garrett Busch at [email protected] or Pouya Honari at [email protected].
About Pacific Hospitality Group (PHG)
Established in 1987, Pacific Hospitality Group (PHG) is a rapidly growing hospitality company with a portfolio of 12 distinctive hotels. Headquartered in Irvine, California, PHG specializes in hotel ownership, management, financing, and development in iconic destinations. PHG oversees a collection of lifestyle and luxury properties, including Paséa Hotel & Spa in Huntington Beach, Hotel Viata in Austin, Ko’a Kea Hotel & Resort in Kauai, and two Napa Valley gems, The Meritage Resort and Spa and The Grand Reserve.
PHG also operates the following branded hotels: AC Hotel and Residence Inn Dallas by the Galleria, AC Hotel Phoenix Tempe/Downtown, AC Hotel Irvine, AC Hotel New Orleans Bourbon/French Quarter Area, DoubleTree by Hilton Irvine Spectrum, and DoubleTree by Hilton Santa Ana/Orange County Airport. Further elevating its commitment to excellence in the hospitality industry, PHG is affiliated with Trinitas Cellars.
About the PHG Evergreen Fund
The PHG Evergreen Fund, set to be unveiled at The Lodging Conference, represents Pacific Hospitality Group’s newest approach to hospitality real estate investment. This initiative is poised to accelerate the growth of the company’s portfolio of hotels.
Contacts
Ajeet Anand
[email protected]