Japan’s Seibu Prince has reached a deal to acquire Ace Group, the parent company of Ace Hotels, for $90 million. Bloomberg first reported the deal, which was corroborated by JLL, who acted as financial advisor. The deal is expected to close on September 30 and is inclusive of the Ace brand and in-house creative agency Atelier Ace.
Under the agreement, Ace Hotels will operate as a subsidiary of Seibu Prince Hotels Worldwide’s hotel division (SPW) while retaining independence in brand and creative direction, a press release said. Ace Hotels was founded in Seattle in 1999 and currently operates eight hotels globally, in Seattle, New York, Brooklyn, Palm Springs, Athens, Kyoto, Toronto and Sydney. Its website heralds a new hotel “coming soon” in Fukuoka, Japan.
Seibu Prince Hotels includes multiple brands with hotels mainly across Japan. It operates four hotels in the U.S., including The Prince Kitano New York. Its intention, it said, is to expand its global portfolio to 250 hotels by 2035. Combined, SPW and Ace will operate 94 hotels worldwide, with seven more in the pipeline.
“The fit between our two companies is powerful,” said Yoshiki Kaneda, president & CEO of SPW. “Seibu Prince brings scale, infrastructure and development expertise across Asia-Pacific and the Middle East, while Ace has deep credibility and a proven track record in North America and Europe. By combining these strengths, we can expand faster and more effectively together.
“By uniting Ace’s pioneering approach with SPW’s heritage of omotenashi, the Japanese art of genuine hospitality, and our global footprint, we are creating a hospitality group that is authentic and globally trusted.”
Ace Hotels shot onto the scene as the anti-brand, known for its uniquely distinctive hipster vibe that permeated its darkly-lit communal lobbies where the buttoned-up and corporate set kept the space aglow punching away on laptops and drinking Stumptown coffee. They all had one person to thank: Alex Calderwood. As it goes, Calderwood with a partner leased a 28-room flophouse in a dubious section of Seattle that was converted into the first Ace Hotel. Calderwood died in 2013.
Ace Hotels carried forward with new openings but there also was attrition. Owners of properties in Los Angeles, New Orleans, Pittsburgh and Chicago turned to other brands or operators, enticed by carrots of key money and better GOP promises. In early 2023, Sortis Holdings, an alternative investment manager based in Portland, Ore., was set to acquire Ace Hotels for $85 million, but the deal fell through. SPW’s acquisition of Ace Hotels gives it the needed capital and deeper pockets of a multinational holding company to expand its footprint.
“We’re honored to join Seibu Prince Hotels Worldwide,” said Brad Wilson, chairman of Ace Hotels. “Over the past decade, we’ve grown the Ace brand globally while staying true to our founding principles: transforming historic buildings, contributing to neighborhood revitalization, and creating places that honor culture and community. Seibu Prince shares these values, and with their strategic vision and international reach, we can continue to safeguard Ace’s independent spirit while taking the brand to new heights.”
Added Chris Penn, CEO of Ace Hotels: “Ace has established itself as a leader in experiential hospitality, with a proven ability to create destinations that resonate across cultures and markets.”
There has been consolidation of late in the ranks of smaller, lifestyle, boutique hotel groups. Last year, Hyatt Hotels Corp. acquired Standard International while Hilton acquired NoMad Hotels. Other notable deals of yore include Accor’s buy of 21C Museum Hotels and the Ennismore platform, which includes brands such as Hoxton.
According to the press release, Ace will also be folded into SPW’s loyalty program, Seibu Prince Global Rewards.