An increasing number of companies are rushing in to acquire financially troubled properties at what they hope will be discounted rates
By LORI WEISBERGJAN. 15, 20215:30 AM
As hotels struggle to survive a nearly yearlong pandemic that has crushed business and leisure travel, an increasing number of companies are rushing in to acquire financially troubled properties at what they hope will be discounted rates.
Jumping into the fray locally is the newly formed La Jolla-based Torrey Pines Hotel Group, which has partnered with Los Angeles-based investment firm Bainbridge DSX to not only acquire lodging properties across the globe but also manage them for the long term.
The new joint venture, which has raised $500 million, is not focusing on any specific geographic niche but is setting its sights on 3.5- to 4.5-star hotels in the United States, Europe and Asia, says longtime hotel executive Mike Slosser, who at one time oversaw a number of well-known San Diego County properties, including L’Auberge Del Mar.
The goal, says Slosser, is an ambitious one, with plans to acquire 200 hotels over the next 15 years. The $500 million, he said, represents a combination of the company’s own capital, plus money from others looking to invest cash that has been sitting on the sidelines.ADVERTISING
“It’s clear that it’s been a year of stressful times in 2020, and I still think it still will be through the first three quarters of this year, so there may be times when we can acquire hotels at below replacement cost,” said Slosser, who most recently was president of Howard Hughes Hospitality where he managed all hospitality-related assets within a $6 billion publicly traded real estate company. “If we can find hotels where we can renovate them and reposition them in the marketplace, we will buy them and hold them long term.”
While there have been no deals signed yet, Slosser said there are some in progress. The focus is on properties that have not been marketed for sale, he said.
“If we did five to 10 this year, that would be a success, it just depends on what we find,” said Slosser, whose firm will oversee the management of any hotels that are acquired. “We’re along the path on several but haven’t closed on anything. When we feel it’s a good investment we’ll pull the trigger.”
The properties they are eyeing for acquisition do not necessarily have to be in need of renovation, but they should have 200 to 400 rooms and be full service, Slosser said. He added that the Bainbridge fund will also look at underserved areas and will consider acquiring the debt on certain properties if the discount is appealing enough.