Commercial real estate owner Flynn Properties and global alternative investment firm Värde Partners have acquired an 80% stake in 89 select-service and extended-stay hotels across the U.S. through a joint venture.
The portfolio has a $1.1 billion implied total enterprise value and was acquired from affiliates of Highgate and Cerberus Capital Management, which will retain 20% interest in the properties, according to the news release. Highgate will continue to operate the properties for the joint venture.
“This acquisition is part of a broader business strategy of Flynn Properties to increase its limited-service hotel footprint, which has proved to be one of the best-performing sectors in the industry,” said Greg Flynn, founder, chairman and CEO of Flynn Properties, in the release.
The deal includes 58 Marriott International-branded hotels, 24 Hilton-branded hotels, four Radisson-branded hotels, two under IHG Hotels & Resorts brands and one under Choice Hotels International, according to the news release. It grows Flynn Properties’ limited-service hotel portfolio to 115 properties. It also owns five luxury resorts.
“The hotel sector continues to strengthen within a complex macro environment and has been demonstrating its ability to offer investors the potential for growing, inflation-protected cashflows,” said Tim Mooney, global head of real estate at Värde Partners, in the release.
“As this cycle continues to evolve, we believe there will be further opportunities to invest selectively in high-quality assets that are well-positioned to capitalize on the robust demand for business and leisure travel,” he said.