Latest news: McKillen sells stake in Irish group; update on troubled SF hotels

McKillen sells stake in Dean Hotel Group. Ireland’s The Dean Hotel Group has agreed to sell a majority stake to an investment vehicle that is managed and led by London-based Lifestyle Hospitality Capital Group and backed by funds advised by Elliott Investment Management. Dean Hotel Group Founder Paddy McKillen, Jr. and the McKillen Co. will retain a stake and remain involved in the business with about eight hotels and 650 rooms. Further terms of the deal were not disclosed. The hotels will continue to be managed and operated by The Dean Hotel Group under its own brands, including The Dean, The Mayson, The Clarence, The Devlin, The Leinster and Glasson Lakehouse. The Dean brand has three hotels operating in Ireland, with two hotels set to open in the U.K. by 2025. The restaurants and bars will also continue to be operated internally by The Dean Hotel Group under its own brands such as Sophie’s, Ryleigh’s, Roberta’s and Layla’s.

Receiver appointed to sell Park properties in SF. Nearly five months after Park Hotels & Resorts announced it had stopped making payments on a $725 million CMBS loan backed by two of the largest hotels in San Francisco, receiver HotelAVE has been appointed to take control of the Hilton Union Square and Parc 55 pending a sale. The receiver was appointed after Wilmington Trust, a trustee representing the lender, filed a lawsuit. HotelAVE will have until September 1, 2024, to find an adequate buyer for the properties. If the receiver doesn’t sell the two hotels before the deadline, the properties will go into nonjudicial foreclosure. The two hotels were valued at a combined $1.56 billion when the CMBS packaged for them was issued in 2016 by JPMorgan Chase. In addition, a report has surfaced that Blackstone is in discussions with CWCapital, a special servicer working on behalf of a CMBS trust, for a “possible deed-in-lieu” deal on the 346-room Club Quarters hotel in San Francisco. In 2020, Blackstone defaulted on a $274 million loan backed by the hotel and other Club Quarters properties in Boston, Chicago and Philadelphia.

Trinity goes to London. As part of a global expansion plan, investor Trinity Investments, Honolulu, has opened a London office under the leadership of Managing Partner Ryan Donn. The office will target hospitality assets in western Europe with an emphasis on the UK, Ireland, Spain, Portugal, Italy and Switzerland. Donn has been with Trinity since 2007, and the firm expects to continue building its U.K. presence while maintaining support from more than 40 professionals based in the U.S. This business expansion follows an active year for Trinity, which executed the largest hospitality acquisition of 2023 with its investment in The Diplomat Beach Resort, and which secured approximately $1.2 billion in combined refinancings for its existing portfolio assets.

Boston Park Plaza buyer named. Developer Parks Hospitality Holdings from Mexico City has been named as the buyer of the 1,060-room Boston Park Plaza for $370 million ($349,000 per key) from Sunstone Hotel Investors. The property is already trading under the Hilton banner and will be rebranded after a major renovation. The hotel was listed for sale in January 2023 and no seller financing was required, according to reports, as the buyer obtained a $200 million mortgage loan. the hotel traded for 12.1x Hotel EBITDA and a 7.1% NOI cap rate. Sunstone acquired the hotel in 2013 for $250 million.

Tampa assets sold. The dual-branded, 177-room Courtyard and Residence Inn Tampa Oldsmar has been acquired by KMD Hospitality Management from MIG Real Estate Group. Hunter Hotel Advisors arranged the sale of behalf of MIG. Terms of the deal were not disclosed.

Canada pipeline. The construction pipeline in Canada stands at 275 projects/37,780 rooms, up 5% by projects and 8% by rooms year-over-year (YOY), according to Lodging Econometrics. In the third quarter, Canada had 22 new project announcements with 2,816 rooms. Hotel projects presently under construction in Canada at Q3 stand at 56 projects/8,228 rooms, up 4% and 18% YOY, respectively. Projects scheduled to start construction in the next 12 months stand at 101 projects/11,548 rooms at Q3, while projects in the early planning stage stand at 118 projects/18,004 rooms; a 13% YOY increase by projects and a 33% YOY increase by rooms. Hotel renovations in Canada at Q3 stand at 40 projects/5,469 rooms, and brand conversions ended the quarter at 58 projects/6,025 rooms. Ontario continues to lead Canada’s hotel construction pipeline with 160 projects and a record high of 22,294 rooms, accounting for 58% of the projects and 59% of the rooms in the country’s total pipeline.

Point A platform grows. Tristan Capital Partners’ latest opportunistic fund European Property Investors Special Opportunities 6 (EPISO 6) and Queensway have completed the purchase of a 63,195 sqft office property on St. Andrew Square in Edinburgh, Scotland from PATRIZIA Hanover PUT (Patrizia). The deal will mark the first add-on investment to the Fund’s Point A Hotel platform, held in a joint venture with Queensway, subject to planning. The transaction will expand the footprint of the platform to 12 locations across the UK and Ireland. The fund acquired a majority stake in the Point A platform in 2022, which at the time comprised a portfolio of 10 operating and one development in the UK and Ireland. The shareholders have committed significant additional equity to fund this phase of growth for the platform with a particular focus on strategic locations in London.

Virginia property trades. The Hotel Weyanoke in Farmville, Virginia, has been acquired by investment bank Ascend Capital Group in partnership with Taylor Hospitality. Taylor Hospitality will provide management for the Weyanoke.Rosewood to Crete. Following a reincarnation of the existing resort, Rosewood Hotels & Resorts will open in 2025 the 154-room Rosewood Blue Palace on the Greek island of Crete.

Strong extended-stay ADR growth. Extended-stay hotel revenue growth accelerated in September, according to The Highland Group.  While occupancy declined slightly for the sixth consecutive month, the strongest average rate gain since May lifted RevPar 2.7% and room revenues 5%. “Extended-stay hotel’s 10.7 percentage point occupancy premium above the overall hotel industry in September is within the long-term annual average range over the last 25 years,” said Mark Skinner, partner at The Highland Group.

Kasa Living funding. To further fund expansion, Kasa Living has closed a $70 million Series C fundraise. Citi Ventures and FirstMark Capital led the all-equity round with participation from new investors New York Life Ventures and Fireside Investments. All major existing investors, including RET Ventures, Zigg Capital, and Ribbit Capital, participated in the twice upsized and oversubscribed round. Jonathan Langer, with board experience at KKR Real Estate Finance Trust, Westin Hotels & Resorts, and Hilton Hotels & Resorts has joined Kasa's Board of Directors. Kasa Living is a tech-powered, flexible accommodations brand and operator founded in San Francisco in 2016 by Roman Pedan. It partners with real estate owners to transform investor-owned multifamily apartments, boutique hotels, and single-family homes into managed accommodations.

Dallas biggest US construction market. The top five U.S. markets with the largest hotel construction pipelines by projects at 3Q23 are led by Dallas, with an all-time high of 189 projects/21,840 rooms, followed by Atlanta, with 140 projects/17,775 rooms, and Nashville, with 122 projects/16,046 rooms. Next is Phoenix, with 119 projects/16,455 rooms, and the Inland Empire, with 117 projects/11,784 rooms, according to Lodging Econometrics. At the 3Q close, New York City continues to have the greatest number of projects under construction, with 46 projects/8,386 rooms. Phoenix follows with 26 projects/5,353 rooms, then Atlanta with 26 projects/4,354 rooms, Dallas with 25 projects/3,178 rooms, and finally the Inland Empire with 23 projects/2,386 rooms. Dallas has the most projects scheduled to start in the next 12 months with 80 projects/9,021 rooms, followed by Atlanta with 60 projects/7,311 rooms, Austin with 47 projects/5,683 rooms, the Inland Empire with 47 projects/4,668 rooms, and then Los Angeles with 46 projects/7,113 rooms. The renovation and conversion pipeline activity remains strong in the U.S. at Q3 with 1,912 hotels/285,568 rooms presently under renovation or conversion.

Pebblebrook earnings. Pebblebrook Hotel Trust reported 3Q23 earnings that showed a net loss of $56.5 million and same-property Total RevPAR increasing 0.2% versus 2022, with urban markets rising 4.3%. Tropical Storm Hilary and Hurricane Idalia negatively impacted RevPAR growth by approximately 90 bps. Urban performance continues to improve and 4Q23 group and transient revenue pace is up 13% compared to 4Q22. “Our third quarter bottom line results were at the top end of our expectations, even after the negative impact of severe weather events on both coasts and the labor strikes in the entertainment industry that primarily affected our Los Angeles properties,” said Pebblebrook Chairman and CEO Jon Bortz. “We continued to see healthy occupancy improvements in our urban market hotels, driven by improving group and transient business travel, as well as solid gains in weekend leisure demand. Our third quarter resort portfolio occupancy was flat year-over-year, though it would have been higher if not for the severe weather events.”

New Comfort prototype unveiled. Choice Hotels International unveiled a new Comfort hotels look and feel with the opening of the first, new construction Rise & Shine prototype in Mountain Grove, Missouri. The 56-room property was developed by Thompson Lodging and includes an outdoor patio anchored by an indoor/outdoor fireplace. Public spaces with high ceilings and floor-to-ceiling windows maximize natural lighting. A multi-purpose flex room converts to serve a variety of uses. Guestrooms featuring upgraded fixtures and furniture, including semi-open closets and new “on the go” stations by the door. Functional lighting throughout the prototype includes the front desk welcome wall, public space millwork shelving, up-lighting on the guest room headboard wall and media panel and on the prototype exterior.

Hyatt milestone in China. Hyatt Hotels Corp. opened the 289-room Hyatt Regency Changshu Kuncheng Lake, marking the first international-branded hotel in Changshu. The property is a one-hour drive from Suzhou, Wuxi and Shanghai.

Leela, Preferred tie-ups. India luxury brand, The Leela Palaces, Hotels and Resorts, and consortia Preferred Hotels & Resorts are expanding their relationship with the inclusion of The Leela Kovalam, A Raviz Hotel, The Leela Ashtamudi, A Raviz Hotel and The Leela Gandhinagar to the Preferred Hotels & Resorts portfolio. The two companies who have been working together for 15 years also announced that two Leela palaces are joining Beyond Green, The Leela Palace Udaipur and The Leela Palace Bengaluru, are joining Preferred Hotel’s global portfolio of sustainable hotels.

New S Hotels CEO. S Hotels and Resorts Public Co. Ltd., part of Singha Estate Group, announced the resignation of Dirk Andre Lena De Cuyper as CEO and SHR Board of Directors and the appointment of Michael Marshall as CEO effective November 16, 2023. Marshall will focus on, among other things, expanding the hospitality portfolio worldwide, and pursuing joint investments to accelerate growth and entry into emerging markets.

Hilton adds in France. Hilton will debut in Lille, France, in 2024 with a conversion under its flagship Hilton Hotels & Resorts brand. The 124-room Hilton Lille will continue to welcome guests and trade as a Hilton affiliated hotel before fully rebranding under Hilton Hotels & Resorts next summer following a multimillion-euro renovation. It joins 23 trading hotels in France across Hilton’s brands.