CHICAGO—Extended-stay hotels have become one of the most sought after property types in the strengthening hospitality sector. And officials from Chicago-based Arbor Lodging Partners believe the Midwest region provides some of the best opportunities for investors. The firm has now bought eight hotels in just the last ten months, including two in the Indianapolis area this summer.

“We really like Midwest markets that have diverse demand generators,” Arbor principal Sheenal Patel tells GlobeSt.com. He is also the chief executive officer of NVN Hotels, an Arbor affiliate that manages operations for its hotels and others owned by third-parties. US manufacturing is on the upswing, and this has had very positive effects on many cities in the central region, especially where auto manufacturers have operations. “Most of the guests that are coming into these hotels are business travelers.”

As for Indianapolis, it has become a powerful hub for distribution, and that burgeoning activity should keep its extended-stay hotels at high levels of occupancy. “These are very stable properties because most of the folks staying there are there for seven or more days.”

“We think it's an attractive point in the cycle to buy hotels,” Patel adds. Although demand in the sector keeps escalating, and Arbor's current properties are generating good returns, “there is still historically below average new construction. This is a by-product of the financial crisis. There are a few markets where we see some new supply, but it's not enough to satisfy the demand.”

Although the firm recently acquired and renovated the 182-unit DoubleTree by Hilton Park City – The Yarrow in Park City, UT, and a Holiday Inn Express & Suites at the New Orleans Airport, it generally concentrates on the Midwest. In addition to Indianapolis, the firm has also bought properties in the Louisville region. And in the next few years, it will continue looking for deals in those Midwest cities, such as Chicago, Kansas City, Cleveland, Columbus and others, where business travel is expected to increase.

The most recent acquisitions are two select service extended-stay hotels in Indianapolis: the TownePlace Suites Indianapolis Keystone, an 82-room hotel, and the TownePlace Suites Indianapolis Park 100, a 94-room property. NVN Hotels will manage the two hotels.

Both are part of the TownePlace Suites by Marriott brand and cater to business travelers. The residential-style suites come in studio, one-bedroom and two-bedroom unit sizes, and offer amenities including ample work space and living areas, and full-sized, fully-equipped kitchens.

“We have grown very quickly this year,” Patel says. “But we are still careful to grow at a rate where we can operate our properties really well.”

“We don't want to be overly aggressive,” he adds, because even though company officials remain optimistic about the economy's prospects, they believe it's possible the extended-stay sector won't grow in 2016 and 2017 at the same quick pace it has done in the past few years. But the economy still has some pent-up demand and Arbor expects a reasonable amount of growth in the sector. “We haven't seen any indication that business travel has started to wind down.”