Exclusive: Hotel Equities' Trust Hospitality signs first deal

ATLANTA – Hotel Equities’ Trust Hospitality division is back in CALA after signing its first management deal for the first Hampton by Hilton-branded property in St. Thomas, U.S. Virgin Islands.

The new first hotel property on the island in 30 years is being developed by Shaun Miller of Haven Development out of St. Thomas through a 50-year ground lease with property owner The V.I. Government Employees’ Retirement System. The 126-room hotel at the Havensight Mall and near the airport is expected to open in March 2025.

The deal follows Hotel Equities announcement in March that it had formed a strategic partnership with a revived Trust Hospitality to develop a management portfolio in the Caribbean-Latin American region. Before it sold its portfolio to Highgate in 2020, Trust was a mainstay manager in CALA and Hotel Equities decided to leverage the longstanding relationships to expand its reach into the region.

We will also establish a business development team in the area and the Trust team is based in Coral Gables, Florida. Just as we did when entering the Canada market, we know the right way to do it is with people from the market who are ingrained in the culture.

Joe Reardon

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Hotel Equities Chief Development Officer Joe Reardon told Hotel Investment Today that Trust has 15 live projects in the works for the CALA region and is also in discussion with two groups that would potentially become operating arms in the markets with the principals, company names and reputations remaining intact. Reardon added that at least one more deal with Trust is expected to be announced in the second quarter.

“We will also establish a business development team in the area and the Trust team is based in Coral Gables, Florida,” Reardon added. “Just as we did when entering the Canada market, we know the right way to do it is with people from the market who are ingrained in the culture.”

Hotel Equities has a lot of dry powder to pursue more deals, alliances and JVs after it formed a strategic partnership with private equity firm PPC Enterprises in January.

Reardon said in March that the new partnership was already working on acquiring existing third-party businesses in markets outside the Caribbean in tough-to-crack markets like Mexico, Colombia, Peru and Chile.

In St. Thomas, the property for the Hampton by Hilton had hurricane-damaged warehouses and the new hotel would be 70,586 square feet constructed on a 1.62-acre parcel, with an above-ground pool, bar, kitchen, laundry, and meeting space. An adjacent 2.662-acre parcel would be used for a welcome center, green space, and parking.

The hotel will serve the business community, including pilots from the nearby airport looking for a reasonably priced room. The Hampton by Hilton St. Thomas is also expected to be a boon to businesses in Havensight, including food operations, as the hotel will only serve breakfast and rely on partnerships with local restaurants.

The ground lease is part of an overall strategy to diversify the mall offerings and spur economic activity to include a local pop-up store, an exhibition hall/museum, historical talks, and authentic cultural experiences for visitors and the community.

The location is adjacent to the cruise ship dock and Miller expects passengers to enjoy the hotel’s patio during the day and attract the local community in the evening with movie nights, classical music and other community events.

Shaun Miller, Haven Development

Miller said he identified a big gap in St. Thomas for a select-service hotel and his group has been working with Trust for quite some time. What really sealed the partnership, he added, is when Trust tied-up with Hotel Equities. “Trust Hospitality has a very strong presence in the Caribbean, and with Hotel Equities they have an extremely robust platform for Trust to expand its operations,” he said. “So, that was very important for us.”

This is Miller’s first hotel venture and if things go well, he said he will consider other hotel developments on the island, which has been rebounding nicely since the latest hurricanes in 2017 as other resorts come back online with major refurbishments.

“We have many more destinations coming to St. Thomas and business is increasing dramatically and this year could have been the record for the number of cruise ships coming into the market,” Miller said. “It’s been a long time coming for a new hotel in St. Thomas and there are a lot of opportunities in the territory, especially for high-end resorts.”