Joint venture partners NewcrestImage and Hospitality Capital Partners (HCP) — have acquired a 16-hotel portfolio for $137.3 million from Service Properties Trust, a Mass.-based REIT.
Totaling 2,155 rooms, the portfolio comprises 13 Courtyard by Marriott hotels and three Residence Inn by Marriott hotels located across nine states — Georgia, Massachusetts, North Carolina, New York, Oklahoma, Pennsylvania, Virginia, South Carolina and Texas.
Out of the 16 properties, 11 underwent significant renovations between 2018 and 2019.
The acquisition is an opportunity for the joint venture to add revenue immediately while simultaneously adding long-term profit potential and asset value, said HCP.
Phoenix-based HCP and its principals have owned around 50 hotels in the western U.S. to date, notably The Saguaro Scottsdale in Scottsdale’s Old Town area. The company’s other assets include 25 golf courses through their associated firm, Parks Legacy Project.
“This transaction suits our company’s style of strategically acquiring properties with strong fundamentals, especially during times of a difficult or slowed down economy,” said Mehul Patel, managing partner and CEO of NewcrestImage.
Since it was founded in 2013, Dallas-based NewcrestImage has completed more than $3 billion in transactions involving roughly 275 hotels with around 30,000 rooms across 130 communities in the U.S. The company currently owns over 70 hotels in the country, totaling about 8,000 rooms.
The transaction was handled by CBRE.
“Closing this transaction was particularly satisfying, given the size of the deal and the challenges we’re facing in the debt markets,” said Al Calhoun, vice chairman with CBRE Hotels in Atlanta. “We were able to complete this transaction by breaking it up into three deals with three different lenders. These lenders had great confidence in the sponsorship and the quality of the brands and markets.”
Earlier this month, the JV partners completed the acquisition of 11 hotels, totaling 1,551 rooms, across seven states. The acquired properties included 10 Courtyards by Marriott and one Residence Inn. CBRE also handled this transaction.
According to a CBRE report, U.S. hotels reported investments worth $44.9 billion in the last four quarters ending in Q4 2022. In the previous quarter, hotels saw $11.9 billion of investment, constituting 9.3% of the total capital markets activity.