UNITED STATES - Kimpton Group Holding raised $246m (€155.6m) through institutional partners for its latest hotel investment fund, Kimpton Hospitality Partners II.
Michael Depatie, chief executive officer of Kimpton, told IPE Real Estate: "We think our timing is right for our new fund. The economy is going to struggle this year and in 2009. Things should start to improve in 2010 and 2011. By this time we will have completed the majority of our renovations and developments."
This economic situation is likely to keep the construction of new hotels to a minimum so Kimpton is placing up to 70% LTV on its purchases for the fund as this will allow it to invest $800m in hotels over the next few years.
The company will only invest in what it considers are boutique or lifestyle hotel in major markets across the US, such as Chicago, Philadelphia, New York, Seattle, Los Angeles and possibly Miami, although it is also looking at some resort areas such as Carmel in California and Santa Fe, in New Mexico.
Hospitality Partners II will carry three types of transactions, so one of those is to buy existing hotels which can be renovated or converted to fit the Kimpton model.
The firm also intends to purchase other kinds of real estate that can be converted into a hotel, such as office buildings or condominiums, while a portion of the commingled fund will also be invested in developing new hotels from the ground up.
Kimpton has a proven track record of being able to out perform the national average as its existing hotel portfolio has an average annual occupancy of 80%, beating the national average occupancy of 63%.