After both sides settled lawsuits, buyer Sortis Holdings
said that with Ace Hotels losing management contracts and interest rates changing the deal
equation, it won’t close.
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.