KUWAIT, 8 February, 2016: Gatehouse Capital K.S.C.C. (“Gatehouse Capital”), a Kuwait-based investment advisor and part of Gatehouse Financial Group Limited (“Gatehouse”), is pleased to announce that it has purchased a portfolio of ten select service hotels (the “Portfolio”) in the United States with the assistance of Arch Street Capital Advisors, LLC. The Portfolio is geographically dispersed across Michigan, Minnesota and Wisconsin. Each of the hotels in the Portfolio has a long-term license agreement to operate the Marriott select service brands TownePlace Suites and SpringHill Suites. This acquisition marks Gatehouse’s second investment into the select service hospitality space, following its acquisition in 2014 of a Marriott Residence Inn located in Midtown, Manhattan. Gatehouse Capital has acquired the Portfolio in partnership with deeply experienced US-based hotel operators Interstate Hotels & Resorts and Waramaug Hospitality.
TownePlace Suites is an extended stay, select service brand of Marriott with over 250 locations. The brand targets business and leisure travellers who require more spacious, suite-style accommodations with fully equipped kitchens, separate work and sitting areas, and at least one bedroom. SpringHill Suites is an all-suites, select service brand of Marriott with over 300 locations that similarly caters to travellers who require more spacious accommodations with dedicated work, relaxation and kitchen areas.
Following the acquisition of the Portfolio, Gatehouse Capital intends to implement an extensive Property Improvement Plan to renovate the properties and position the Portfolio well into the future. These upgrades are expected to drive further Revenue per Available Room (“RevPAR”) growth in the Portfolio. The Portfolio benefits from an acquisition price below new build cost, which acts as mitigant to competitive threats from future supply. Further, as the Portfolio is comprised of ten separate hotels, it benefits from diversification and is not overly reliant upon the performance of a single one asset.
Fahed Boodai, Chairman of Gatehouse Financial Group stated, “As the US economy continues to expand, the select service hospitality market exhibits attractive investment characteristics. The Portfolio is well-positioned to capitalise on demand from business travellers, as the hotels are located in close proximity to several Fortune 500 corporations, including Ford Motor Company, CH Robinson, United Health Group, and Harley-Davidson. The Midwest United States is home to many high performing global businesses, giving us further confidence that this is a solid investment opportunity with significant capital growth potential and secure income returns.”
Boodai added: “Gatehouse continues to build on its excellent track record of real estate investment in the US and UK. Our clients understand that Gatehouse is a leader in the delivery of high-quality, income generating real estate investments. The Portfolio is an excellent addition to the investment portfolio.”
“Interstate’s success is due in part to its strategic partnerships,” said Leslie Ng, Interstate’s Chief Investment Officer. “We are delighted to have a leading international investor like Gatehouse Capital as our partner as well as continuing our work with Waramaug, a highly regarded firm in the hospitality sector.”