Thayer Lodging Group announced on Wednesday that Brookfield Asset Management has purchased it for an undisclosed sum.
The former Thayer Lodging Group, Annapolis, Maryland, will continue to operate Thayer’s investment management, asset management and property management businesses as a subsidiary of Brookfield Asset Management, Toronto. The new company’s employees will continue to report to Bruce Wiles, Thayer’s president, Leland Pillsbury and Fred Malek, co-founders and chairmen of Thayer Lodging Group, will serve as co-chairmen and co-heads of global lodging of the new company and as senior advisors to Brookfield.
“We are pleased that Brookfield sees in Thayer a portal to attractive real estate investment opportunities, a proven value-added operating partner, and a profitable operating platform. At Thayer, we will continue to do what we have always done – acquire hotel real estate below replacement cost, and aggressively increase NOI by increasing market share, managing channels of distribution, and controlling costs,” Malek said.
Brookfield has about US$175 billion in assets under management and its deep pockets will bolster Thayer’s acquisition capacity. The deal showcases how the U.S. lodging’s industry’s positive fundamentals are drawing outside capital. “Brookfield had minimal lodging exposure prior to this transaction, furthering our belief that lodging has become more of a ‘core’ real estate asset class today,” David Loeb, an analyst with R.W. Baird & Co. wrote in a note to investors. “Thayer principals are staying on to grow the platform through further hotel investments, signaling their belief we haven’t reached the top of the cycle yet.”
Thayer co-owns Interstate Hotels & Resorts, Arlington, Virginia, with Shanghai Jin Jiang International Hotel Group Co., Shanghai. The pair bought Interstate via joint venture in 2010.