San Francisco-based Flynn Properties, owner of commercial real estate, luxury resorts and select-service hotel properties, in a joint venture with alternative investment firm Värde Partners, has acquired for US$211 million from Apple Hospitality REIT 20 select-service hotels – 11 Marriott- and nine Hilton-branded hotels.
The newly acquired properties in the United States, located throughout the Sunbelt, Northeast, Pacific Northwest and Midwest, will undergo capital improvements over time. Flynn Properties will serve as the managing member of the joint venture, charged with day-to-day asset management of the portfolio and execution of the business plan.
The Phoenix Avondale Courtyard was part of the joint venture acquisition
This acquisition will bring Flynn Properties’ select-service hotel portfolio to 26 properties, complementing the six existing Marriott-branded hotels it currently owns. Flynn Properties’ prior hotel investments include six Marriott Courtyards as well as four luxury resorts: Esperanza in Los Cabos, Mexico, the Carneros Resort & Spa and Solage, both located in Napa, California, and the Hotel Madeline in Telluride, Colorado. Its commercial investments consist primarily of tech-oriented office buildings on the West Coast totaling over 3 million square feet. It says affiliate, Flynn Restaurant Group, is the largest franchise restaurant operator in the world and one of the 20 largest foodservice companies of any kind in the United States, owning and operating 2,400 restaurants in 44 states generating US$3.6 billion in sales and employing approximately 73,000 people.
Värde has over 25 years of experience investing in real estate, including financing and owning hospitality properties. The firm recently completed the sale of a portfolio of eight European luxury hotels operating under The Dedica Anthology brand in September 2020 after transforming the hotel group by appointing a best-in-class management team, refinancing the business, and executing an ambitious investment program.
“This acquisition is part of a broader business strategy by Flynn Properties to increase its select-service hotel footprint, which proved to be one of the best performing sectors in the industry,” said Greg Flynn, founder, chairman and CEO of Flynn Properties.
Francisco Milone, head of Real Estate Special Situations at Värde Partners, added that the acquired properties have fared well through the pandemic, demonstrating the healthy demand for select-service hotels and the strength of their brands. “The hotel sector has experienced an unprecedented shock, with extreme levels of cash-flow disruption driving a significant demand for capital,” Milone said. “As the sector begins to recover from the pandemic, we believe there will be opportunities to invest selectively in high quality assets that are well positioned to capitalize on the return of business and leisure travel.”