ATLANTA — KSL Capital Partners has long been known for its investments in the resort and luxury lodging spaces, but the venture it launched last year, Mission Hill Hospitality, focuses on select-service and extended-stay hotel investing — a highly competitive spot in the current investment landscape.
CEO Greg Kennealey, a 10-year KSL veteran who held the roles of principal and head of hospitality at the company, said Mission Hill is in it for the long haul.
“We felt that the most important thing we could do to ensure Mission Hill's success for the long term was to put together a good team,” he said in a video interview with Hotel News Now that took place during the Hunter Hotel Investment Conference. “Recruiting that team during Covid, getting folks to relocate to Denver, that was hard, but people have taken the leap with us and done it and we’re off to a good start.”
The company’s current portfolio of 19 hotels is dominated by SpringHill Suites and Residence Inn properties, with several Home2 Suites by Hiltons, along with other brands like AC Hotels, Hampton Inn and Tru by Hilton.
“Many of [our hotels] are in drive-to leisure markets … and KSL has been targeting those types of markets for a very long time,” Kennealey said. “During the downturn, we targeted a number of those markets, so we have assets in the Florida Panhandle and Myrtle Beach … and Cape Cod, Massachusetts.”
With so many investors going after these types of assets, Kennealey said “the pricing situation has been interesting” as of late, though he said in his opinion, the bid-ask gap is narrowing.
“That’s not because sellers are moderating; it’s because there’s now more and more capital chasing the same number of deals and so prices are getting bid up,” he said. “So despite how active we’ve been, we’re getting routinely outbid by 5%, 10%, even 15% in many cases, particularly in these drive-to leisure markets.”
While Kennealey said Mission Hill would love to be a net seller in this market, the company, at just over 1 year old, is just too young.
“We’re very much in acquisition mode now, and we have the benefit of holding an asset for two years or 10 years if we deem that’s value maximizing,” he said. “I would expect us to be acquisitive over the long term. We are designed to be a long-term investment vehicle for KSL.”
For more from Mission Hill Hospitality CEO Greg Kennealey, watch the video above.