Amesbury, Massachusetts-based developer and operator Lark Hotels has formed a partnership with real estate private equity firm Equity Resource Investments (ERI) to acquire and develop Bluebird by Lark properties throughout New England.
Lark Hotels Founder Rob Blood said the partnership will target value-add opportunities, specifically purpose-built hospitality properties in the 40- to 75-key range. While the partnership will be mainly focused on acquiring and repositioning hotels through Lark’s development platform, Blood also anticipates deploying a portion of the capital to “co-GP” opportunities with other developers. “We encourage potential partners to reach out with opportunities to work together,” he said.
Blood told HOTELS on Wednesday that the total capitalization per property will be between US$4 million and US$6 million, and the anticipated total value of the joint venture portfolio between Lark Hotels and ERI will be US$40 million.
Lark Hotels and ERI have been collaborating for the last seven years and this partnership will allow Lark to expand its recently-launched Bluebird brand throughout the Northeast by opening at least six properties in emerging destinations over the next two years. Outside of this partnership, the Bluebird brand has recently opened Spa City Motor Lodge (also with ERI), a reimagined motor lodge in the heart of Saratoga Springs, New York, and will launch Parker Beach Lodge (with a third-party owner unrelated to ERI), a beach lodge for family getaways on Cape Cod, Massachusetts, in August 2021.
When looking for new destinations for potential Bluebird hotels, Blood said Lark considers two types of locales – well known destinations and hidden gems that can equally serve as waypoints along a traveler’s journey. Bluebird looks for hubs that serve as access points to broader regions, such as Saratoga Springs, a hub within the Hudson Valley, and Stowe, Vermont, the forthcoming home of Tälta Lodge and an access point to the Northeast Kingdom.
Launched in 2012, Lark Hotels currently has a portfolio of 30-plus branded boutique hotels on the East Coast and California. In 2020, it launched a third-party management division focused on the management and marketing of independent hotels throughout the United States. In 2021, Lark Hotels launched Bluebird by Lark, a sister brand focused on the development of boutique roadside lodges – reimagined for the great American road trip.
“This joint venture marks a meaningful milestone for our company as we look at new locations across the country; we feel grateful to be rapidly expanding on all fronts, especially when it comes to introducing the Bluebird by Lark brand,” Blood said. “We look forward to collaboratively working with ERI to fill this innovative gap in the boutique hospitality market by creating a new travel experience focused on enjoying the journey as much as the destination.”
“Based on the investment that Lark has made in its human capital, tech platform and marketing infrastructure, we felt that this was the right time to further invest in the boutique hospitality market and help propel the growth of Bluebird,” said Mike Gallerstein, principal of ERI. ERI invests in niche markets and hard-to-evaluate opportunities, areas where traditional real estate investors may be unable or unwilling to spend the time to transact.
As Lark maps out plans for continued growth, there are several openings scheduled for the immediate future. Following the recent opening of Spa City Motor Lodge, Bluebird by Lark will next introduce:
- Bluebird Parker Beach Lodge, South Yarmouth, Massachusetts, opening August 2021
- Bluebird Tälta Lodge, Stowe, Vermont, opening October 2021
- Bluebird Sunapee Lake, Sunapee, New Hampshire, opening Summer 2022
- Bluebird Dennisport, Dennisport, Massachusetts, opening Summer 2022
- Bluebird The Hunter, the Catskills, Hunter, New York, opening Summer 2022