Hotel Management — March 2012
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Kimpton makes move into Cleveland
Boutique adaptive reuse project to open in 2013
Kimpton Hotels and Resorts has struck a deal with developer CRM Real Estate to open a boutique hotel with meeting space in downtown Cleveland.
“It’s a great old building that’s centrally located and we’re very excited to turn it into something new,” said Tom Riley, VP of acquisitions and development for Kimpton Hotels & Restaurants.
The project calls for a 161-room hotel in Cleveland’s historic Schofield Building, which was built in 1902. “The building is over 100 years old and somewhere, in the 60s or 70s, they put a really ugly skin on it,” Riley said. “The developer has taken it off; I can’t image why someone would have ever covered it up. We’ll be able to configure the ground floor to get some really great restaurants in there.”
The property will also feature luxury apartments. “The top couple floors are going to be the residential component, 25 units,” Riley said. “The retail opportunity is small, nothing huge. We’ll offer hotel amenities to the residences; this is a great model for us.”
Renovations are already underway on the property. Kimpton will capitalize on demand for meetings in downtown Cleveland by managing meeting space. “If the whole thing were a hotel, we would probably not have enough meeting space,” said Riley. “There will be 7,500 square feet of space. The ballroom is going to be two stories with high ceilings, a very dramatic space.”
Kimpton’s portfolio currently stands at 54 hotels, and the company remains on the lookout for opportunities to open boutiques in markets with strong demand. “For a boutique, there’s nothing like what we do to bring the experience,” Riley said. “There’s a very good place for us to do what we are doing in Cleveland and be successful because it’s lacking in the market. There are a couple great demand drivers underway in Cleveland, the medical mart and casino.”
Chartres changes direction
National Report–Chartres Lodging Group kicked off 2012 by shaking up its executive management, in an attempt to adapt to a marketplace that is more friendly to deal-making with private equity groups.
“We’re putting ourselves in the best position to take advantage of the up cycle were entering into,” said Rob Kline, former president and current CEO of Chartres. “For private equity investors like us, the opportunity hasn’t emerged until recently. REITs have had access to incredibly cheap capital that has allowed them to be more active. We’ve spent a lot of time selling assets to the REITs and working on our existing portfolio to get ready for the upswing.”
The company plans on putting $1 billion toward acquisitions in coming years. In February, Chartres acquired the Novotel New York Times Square in a partnership with Apollo Global Real Estate Management. “On the acquisitions front, we haven’t been able to be successful against REIT capital and a lack of financing,” Kline said. “An asset that we purchased a little over a year ago, a Hyatt Place ocean resort in Waikiki, we did with all cash. It takes a very unique set of circumstances to be comfortable doing that; there haven’t been many opportunities like that.”
Chartres, which has been known for investment in the Japanese hotel market, will focus more heavily on domestic U.S. markets. “Every major market is up,” said Kline. “For us, it’s been about internally shifting resources to be more growth-oriented whereas over the last four years there’s been a very intense focus on our existing portfolio. Our sweet spot has been properties in some form of distress, in primary markets and markets that are trending upwards.”
Kline plans to be opportunistic when it comes to adding to Chartres’ portfolio. “There’s not a lot of product available, it’s slim pickings, so it takes a lot of focus and quick action to be successful in the market, along with a willingness to buy all cash,” Kline said. “It’s really unpredictable. I can assure you that there’s a tremendous amount of mezzanine financing available. It’s the senior debt that is still most difficult to find.”
Kimpton makes move into Cleveland
Boutique adaptive reuse project to open in 2013
Kimpton Hotels and Resorts has struck a deal with developer CRM Real Estate to open a boutique hotel with meeting space in downtown Cleveland.
“It’s a great old building that’s centrally located and we’re very excited to turn it into something new,” said Tom Riley, VP of acquisitions and development for Kimpton Hotels & Restaurants.
The project calls for a 161-room hotel in Cleveland’s historic Schofield Building, which was built in 1902. “The building is over 100 years old and somewhere, in the 60s or 70s, they put a really ugly skin on it,” Riley said. “The developer has taken it off; I can’t image why someone would have ever covered it up. We’ll be able to configure the ground floor to get some really great restaurants in there.”
The property will also feature luxury apartments. “The top couple floors are going to be the residential component, 25 units,” Riley said. “The retail opportunity is small, nothing huge. We’ll offer hotel amenities to the residences; this is a great model for us.”
Renovations are already underway on the property. Kimpton will capitalize on demand for meetings in downtown Cleveland by managing meeting space. “If the whole thing were a hotel, we would probably not have enough meeting space,” said Riley. “There will be 7,500 square feet of space. The ballroom is going to be two stories with high ceilings, a very dramatic space.”
Kimpton’s portfolio currently stands at 54 hotels, and the company remains on the lookout for opportunities to open boutiques in markets with strong demand. “For a boutique, there’s nothing like what we do to bring the experience,” Riley said. “There’s a very good place for us to do what we are doing in Cleveland and be successful because it’s lacking in the market. There are a couple great demand drivers underway in Cleveland, the medical mart and casino.”
Chartres changes direction
National Report–Chartres Lodging Group kicked off 2012 by shaking up its executive management, in an attempt to adapt to a marketplace that is more friendly to deal-making with private equity groups.
“We’re putting ourselves in the best position to take advantage of the up cycle were entering into,” said Rob Kline, former president and current CEO of Chartres. “For private equity investors like us, the opportunity hasn’t emerged until recently. REITs have had access to incredibly cheap capital that has allowed them to be more active. We’ve spent a lot of time selling assets to the REITs and working on our existing portfolio to get ready for the upswing.”
The company plans on putting $1 billion toward acquisitions in coming years. In February, Chartres acquired the Novotel New York Times Square in a partnership with Apollo Global Real Estate Management. “On the acquisitions front, we haven’t been able to be successful against REIT capital and a lack of financing,” Kline said. “An asset that we purchased a little over a year ago, a Hyatt Place ocean resort in Waikiki, we did with all cash. It takes a very unique set of circumstances to be comfortable doing that; there haven’t been many opportunities like that.”
Chartres, which has been known for investment in the Japanese hotel market, will focus more heavily on domestic U.S. markets. “Every major market is up,” said Kline. “For us, it’s been about internally shifting resources to be more growth-oriented whereas over the last four years there’s been a very intense focus on our existing portfolio. Our sweet spot has been properties in some form of distress, in primary markets and markets that are trending upwards.”
Kline plans to be opportunistic when it comes to adding to Chartres’ portfolio. “There’s not a lot of product available, it’s slim pickings, so it takes a lot of focus and quick action to be successful in the market, along with a willingness to buy all cash,” Kline said. “It’s really unpredictable. I can assure you that there’s a tremendous amount of mezzanine financing available. It’s the senior debt that is still most difficult to find.”
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