Atlanta-based Noble Investment Group closed its Noble Hospitality Fund V with $1 billion of equity intended to be deployed to value-added investments in select-service and extended-stay hotels in the U.S.
The real estate investment company's fifth fund comprises public state pension plans, corporate pensions, endowments, foundations, insurance companies and wealth management firms. About 90% of Noble’s existing limited partners repeated their commitments for Noble Fund V, the company said in a statement.
“Our team, sourcing relationships, research DNA, data and insights continue to generate outstanding returns for our investors and provide Noble with a significant and scalable competitive advantage,” Noble CEO Mit Shah said in the release. “The overwhelming support of Noble Fund V reflects the enduring trust of our limited partners, and we remain deeply grateful for their continued confidence in us as their fiduciary.”
Noble Managing Principal Ben Brunt said in the release that the company has proven its ability to “deploy capital opportunistically.”
“The magnitude of loan maturities combined with record amounts of past-due renovations have created a generational investment opportunity for Noble to acquire income-producing hotels, recapitalize owners, and add value both operationally and physically,” Brunt said.
Back in June 2023 at the NYU International Hospitality Industry Investment Conference, Shah cited a few reasons as to why Noble will continue investing in the midscale, select-service segment.
“One is from a cost-to-build standpoint, even though constructions costs are $230 to $240 a square foot, we believe that we can build these with land for $130,000 to $140,000 a key,” he said. “We believe $90ish [revenue per available room] in these assets, and because we believe we can run them with circa seven to eight full-time employees … you can start really generating those same kinds of profit margins.”