Eternal Companies was the first owner in Choice’s reintroduced SOAR
program. We talked to Damon Healey about his company, the first deal and what he
represents.
BETHESDA, Maryland — Damon
Healey caught the “bug” for economy extended-stay hotels while he was at
Brookfield Asset Management. Now, he has formed a company with a mission to
scale that asset class on a national level in what is becoming an increasingly
crowded space.
“Our core thesis is… we have the
capabilities to really scale into this asset class,” said Healey, founder and
managing principal for Bethesda, Maryland-based Eternal Companies. “We think
that’s a unique skill set… Our goal is to expand through acquisition and then
start to dive into the development markets on a strategic basis. That strategy
also gives us time to see how all of the other brands shake out.”
Healey made headlines in late
August by getting the first contract awarded by Choice Hotels International for
its newly reintroduced SOAR program, which is designed to create hotel
ownership opportunities for underrepresented entrepreneurs. On May 30, Eternal
Companies converted two properties in Georgia to Choice’s Suburban Studios
extended-stay brand: the 92-key Suburban Studios Columbus Bradley Park in
Columbia, Georgia, and the 73-key Suburban Studios Macon North in Macon,
Georgia.
Healey got his start in commercial
real estate at places like Key Bank Real Estate Capital, Jair Lynch Development
Partners and the grocery chain Lidl U.S. before moving to Brookfield, where he
got his first taste of hospitality. The company was buying 100 of Choice’s
WoodSpring Suites extended-stay hotels and needed someone to help them expand
the portfolio. Healey developed 10 to 15 hotels and acquired some for Brookfield, as well.

The Suburban Stadium Columbus Bradley Park was one of the first assets acquired by Eternal Companies.
When the portfolio was sold to Blackstone and Starwood Capital Group
in early 2022, Healey said he knew it was time to form a new company based on
the skill set he had acquired. “What I learned is that there
just weren’t a lot of players doing [economy extended-stay] at on a national
level,” Healey said. “The idea behind our extended-stay strategy is we really
know how to do this.”
Healey admits that the
extended-stay space is becoming increasingly crowded, with all the major hotel
brands launching new brands and building hundreds of extended-stay hotels
across the U.S. “There are so many players now
in the space, and so I had to really think about where we were in the landscape
and, with all of the new brands coming in, where can we play in the space
currently, and then try to expand that going forward.”
That’s when Eternal settled on
doing conversions in the economy extended-stay space. “We knew what construction costs
were because of the hotels that we have built while at Brookfield,” Healey said.
“Staying in touch with industry participants and understanding what RevPAR you
need to continue the profitability that extended-stay economy is known for. We
felt like the conversion opportunity, at least in the short term, was the
better opportunity to get started.”
Eternal is funded through a
combination of self-funding along with a group of investment partners. Healey
said the company will then essentially syndicate each of its future deals. “We have a core base of
investors that are interested in what we’re doing,” he said. “Then we are also
expanding that out to limited partners, potential limited partners via fund
vehicles or joint ventures for folks that are interested in really getting into
the space.”
Inside the first
deal
Healey admitted the deal landscape
has changed since his days at Brookfield, especially with higher interest rates
and the current capital market. “The lending market has been a
challenge and the capital raising market has been a challenge,” he said. “We
call it a win to be able to do a two-pack on our first deal coming out.”
Eternal worked with
Phoenix-based Arriba Capital to finance its first deal. (Choice also said it
offered key money in the deal, something Healey confirmed.)
Although Healey
said it wasn’t his first choice because of its time to close, the company went
with an SBA loan for its first acquisition. He said that because Eternal maxed
out its SBA capacity with its first deal in the future, the company would have
to look elsewhere for lending (he said it would likely be private debt markets
because of the speed they offer).
“We had offers from some
of the debt funds and things of that nature but knew that the SBA was going to
be our best route for our first one,” he said.

Part of the thesis, in terms of doing conversions, is you’re buying existing cash-flowing assets right at the peak of the interest rate market.
Damon Healey
Looking back, Healey said the
SBA loan was very competitive, especially because the company is banking on
rate cuts coming for the variable-rate loan.
“Part of the thesis, in terms of
doing conversions, is you’re buying existing cash-flowing assets right at the
peak of the interest rate market,” he said. “We had some private groups that
were willing to fund within, like, 21 days, for example, but the cost of that
loan was substantially higher.”
Eternal converted the two hotels
in only 30 days, something Healey said his company can’t take all the credit
for. “Honestly, it’s a credit to
Choice and our management company (Cleveland-based J&P Asset Management),”
he said. “A combination of all of us came up with a plan that said we can
implement our PIP in phases. The good news is when we took over these hotels,
the occupancy was pretty good. I believe they were both in the 70s… We said to
Choice that we don’t want to lose this business.”
Healey said that the initial
PIPs were completed in July, and both hotels have had occupancy in the 80s and
90s this summer.
As for the assets themselves,
Healey said the key was the demand drivers and a hotel that already had quality
ownership and management before. He said both are military towns. “They are secondary markets, but
they’re relatively robust markets, and our primary investor was also familiar
with those markets due to some investments that they made in other asset
classes,” he said.
Black ownership in
hotels
Healey also knows
that the hospitality industry has a long way to go in improving the percentage
of Black hospitality owners. Research from the National Association of Black
Hotel Owners, Operators and Developers in 2023 showed that despite nearly 20%
of the lodging workforce being Black, less than 2% of hotel owners are Black.

If we can build more capacity amongst African Americans and other Black folks to be able to do this and do it confidently and present themselves in a way that can attract the capital, that’s key because that’s always the number one issue.
Damon Healey
“It’s something that I am
passionate about and it’s something that is needed, for sure,” he said. “I’ve
been in the commercial real estate space for a while, and I’ve been used to not
seeing a lot of people like myself.”
Healey said he’s pretty low-key
and not really used to a lot of attention, but he is happy to be visible and a
role model in this area, both for Choice’s SOAR program and Black
representation in the hospitality industry in general.
“What resonates with me is
looking at who I was 20 years ago and saying if I can inspire that person or
someone else who says, ‘Hey, this is going to be too difficult,’ or ‘There’s
not a pathway for me to be able to own a hotel or really get into the largest
segments of real estate,’ that’s what motivates me… I’m proud of being an
ambassador, so to speak, in that regard because it’s much needed.”
Healey said within Eternal’s
core group of investors are five African Americans who are all new to
hospitality ownership. “If we can build more capacity
amongst African Americans and other Black folks to be able to do this and do it
confidently and present themselves in a way that can attract the capital,
that’s key because that’s always the number one issue.”
What’s in the
pipeline?
Healey said Eternal would like
to make four more acquisitions before the end of the year, maybe all in one
deal. “We prefer to target portfolio
transactions if possible,” he said. “Taking down three or more at a time would
be our preference… For the investor base we are targeting, that’s the model
that works well for us… We love to scale, and that’s where we see a competitive
advantage in the marketplace.”
Healey’s long-term vision for
the company is to expand in the economy extended-stay market. He added he would
be “ecstatic” if the company had a portfolio of 20 to 30-plus hotels within
five years.
Healey said he would love to
work with Choice again, especially because of the support the SOAR program
offers. “One of the things I’ve learned
in my career is to be successful, you need to be focused, and so we love to
rinse and repeat what we’ve done here,” he said. “We are open to other brands,
but our primary objective right now is to rinse and repeat with Choice if we
can.”