Developer walks away from $85M Ace Hotels deal

PORTLAND, Oregon – The tumultuous ownership history of Ace Hotels took another turn on Friday when the Portland (Oregon) Business Journal reported that Sortis Holdings has halted its planned $85 million cash acquisition of Ace Group International and its management firm Atelier Ace. Records indicate that Stefanos Economou and Ace Hotels CEO Brad Wilson own nearly 95% of Ace through investment vehicles.

Sortis said in a statement that after lawsuits between the two companies were settled earlier in the year to keep the deal on track, Ace lost 20% of its management portfolio as well as a key employee. Over a year ago, the Ace Hotel Chicago permanently closed its doors. Properties in Pittsburgh and London also closed during the pandemic.

Add changing macroeconomic conditions, especially higher interest rates, and the equation for the deal changed, causing Sortis to walk away.

Sortis added that the company is “strategically refining” its portfolio and plans to “double-down” on its remaining brands.

Sortis Holdings, which two years ago acquired the Ace in Portland and has been investing in multiple other hospitality-related concepts in the Portland, Oregon, area since the beginning of the pandemic, also stated it is laying off workers 30 staffers as a result of the Ace deal going south. Other reports have suggested that  Sortis is facing lawsuits due to debt delinquencies.

Hotel Investment Today will follow up with both parties to report further on this deal collapse, but this adds another chapter to the Ace Hotels story, which started in 1999 with the Ace Seattle and today lists 10 properties in its portfolio, lost its founder Alex Calderwood in 2013 and suffered through the pandemic after opening a new concept in New Orleans in 2019.