NEW YORK—Scout Real Estate Capital is talking to potential capital partners about the possibility of raising its first hotel fund.
Such discussions are in the very early stages, and it is too early to say how much capital could be raised, said Susan M. Hardin, VP of acquisitions and finance at Scout. “We’re not quite at that point,” she said, adding that previous transactions were funded on a deal-by-deal basis.
Ideally, Scout would look to do two or three new deals with the capital that is raised. Scout is seeking resort hotels with a value-add component and unfinished resorts with excess land to be developed.
The company has three hotels under its belt now, and also owns 6,000 acres of land in Hawaii that could be developed, Hardin said. Scout’s owned hotels are The Harbor View Hotel & Resort in Edgartown, Massachusetts; the Sea Crest Resort in Cape Cod; and the Plantation Golf Resort & Spa in Crystal River, Florida.
Sea Crest (266 rooms at the time of purchase) and Plantation (196 rooms) were acquired in 2010 for US$77,000 per room and US$21,000 per room, respectively, Hardin said.
“We’re looking to expand our portfolio,” Hardin said. “We see new opportunities everyday.” On its website, Scout indicates it would consider deals in the US$20-million to US$400-million range.
Scout does not have one particular geographic region in mind for acquisition but would prefer deals on the East Coast.
“We have pretty good infrastructure in New England, so we’re always attracted to that area,” Hardin said.
The company will do all-cash deals but would also consider leverage. “If we can find non-recourse debt, we certainly do,” she said.
For certain properties, the debt markets are open, Hardin said.
“For stable, income-producing assets … there’s pretty good leverage out there,” she said.