“Generational investment
opportunity” has Noble ready to acquire income-producing hotels, recapitalize
owners, and add value both operationally and physically.
Noble Investment Group, Atlanta, has closed its Noble
Hospitality Fund V, L.P. (Noble Fund V) with an oversubscribed $1 billion of
equity commitments. This is the fifth of Noble’s flagship series of real estate
funds focused on value-added investments in select-service and extended-stay
hotels across the United States. When this fund is fully deployed, the projected asset value is anticipated to be approximately $3 billion.
Noble Managing Principal Ben Brunt told Hotel Investment Today that the group does anticipate including larger portfolio deals as part of the fund deployment. Currently, the fund is 25% committed and has already closed on two sizable portfolios.
Brunt added that Noble has a history of being creative with a portion of its capital, offering a variety of solutions for owner/operators beyond straightforward asset acquisitions. This strategy will continue into Fund V, which may include supplying debt.
When asked if the fund will invest outside of the select-service and extended-stay spaces, Brunt reiterated that fund's focus is specifically on those asset classes as they feature a more efficient operating model, attract the largest traveling demographic, and provide outsized yields compared to other real estate property sectors.
The magnitude of loan maturities combined with record amounts of past-due renovations have created a generational investment opportunity for Noble to acquire income-producing hotels, recapitalize owners, and add value both operationally and physically.
Ben Brunt
Investors include a global institutional base, including
public state pension plans, corporate pensions, endowments, foundations,
insurance companies, and wealth management firms. Noble said 90% of its existing limited partners repeated their commitments to Noble Fund V, together with commitments from several new institutional investors.
Noble added that it has delivered a 15% net IRR on $3
billion of realized capital across multiple market cycles over 30 years.
“The magnitude of loan maturities combined with record
amounts of past-due renovations have created a generational investment
opportunity for Noble to acquire income-producing hotels, recapitalize owners,
and add value both operationally and physically,” Brunt added. “Over multiple cycles, we have demonstrated that our
experience, patience, and discipline allow us to deploy capital
opportunistically.”
Noble, which has invested nearly $6 billion in communities
throughout the country, stated that secular demand growth in travel and
hospitality combined with substantially muted new supply continues to provide
long-term pricing power for the sector. It added that those fundamentals should
help them deliver “outstanding risk-adjusted returns for the firm’s investors.”
Since the second quarter of 2021, Noble said it has made $2 billion of new investments and has averaged double-digit equity distributions each year.
“We continue to source opportunities not readily available
to the open market, utilizing Noble’s vertically integrated competencies to
make our investments more efficient, more profitable, and more valuable,"
said Noble Managing Principal Steven Nicholas.