Continues to Aggressively Expand Development, Third-party Management in Upper Upscale and Premium-branded Segments
Concord Hospitality Enterprises today announced that it has entered the initial stage of forming a $300 million discretionary private equity fund. The fund, which will focus on acquiring distressed hotels and debt, is expected to close within the next 90 days.
Additionally, the company said it continues to aggressively expand its development and third-party management growth. Year-to-date, Concord has developed and opened 9 properties and entered into one joint venture partnership. The company expects to open or sign management contracts for at least three additional properties by year end.
'In 2007, we sold a 19-hotel portfolio that gave our investor partners and us more than $500 million to expand and enhance our portfolio,' said Mark G. Laport, president and CEO of Concord Hospitality. 'During the course of the last two years, we've leveraged that capital to develop 16 new hotels, of which 13 are open with the remainder scheduled to open later this year and in 2010.
'The fund will allow us to continue our plan to double the size of our portfolio within the next few years, despite the recession,' he said. 'We believe there will be attractive acquisition opportunities for both hotels and hotel debt, and we expect to be a significant player in those markets.'
Laport noted that the company also has dramatically expanded its third-party management and today operates more than 30 properties, or about half of its portfolio, for other owners. 'We are expanding into the Southwest, Southeast and Mid-Atlantic regions, as well as Canada,' he commented. 'We also now are quite active in the upper upscale and resort segments. Our portfolio is now in more than 14 states and two Canadian provinces, and includes branded properties as well as independent hotels and resorts. This geographic, brand and segment diversification gives us greater strength and stability in all phases of the economic cycle.'
Concord recently signed management contracts for the independent 88-room Oceans Sands resort in Pompano Beach, Fla., the company's first foray into the resort sector, and a Starwood property in Houston, which is the company's first Starwood Hotels & Resorts flag. Concord has been an approved Starwood management company for two years. It is also approved to operate Marriott, Hilton, Choice, Hyatt and Intercontinental Hotels.
'The Ocean Sands and the Brook Hollow are both key additions for Concord,' said Grant L. Sabroff, Concord's senior vice president of business development. 'We're diversifying our portfolio to apply our expertise to new brands and segments. These properties will further demonstrate the breadth and depth of our expertise.'
Concord's 2009 growth-to-date includes:
• 382-room Starwood property, Houston-management contract, effective October 1
• 135-room Courtyard by Marriott Reading, Pa.- own and operate, opened in September
• 132-suite Residence Inn by Marriott San Antonio Northeast- own and operate, opened in September
• 124-room Courtyard by Marriott San Antonio Northeast - own and operate ,opened in September
• 108-room Fairfield Inn & Suites by Marriott in Cumberland, Md.- own and operate, opened in August
• 88-room Oceans Sands Resort, Pompano Beach, Fla.-joint venture partnership and management contract, acquired in August. Currently undergoing a $5 million renovation.
• 121-suite Springhill Suites by Marriott, Webster, Texas- own and operate, opened in June
• 132-room Hilton Garden Inn Arlington, Texas- own and operate, opened in June
• 104-room Residence Inn by Marriott at the Colony, Dallas, Texas-management contract, opened in June, owned and developed by Jackson-Shaw
• 104-room Fairfield Inn & Suites at the Colony, Dallas, Texas-management contract, opened in June, owned and developed by Jackson-Shaw
• 120-room Courtyard by Marriott Hamilton, Ohio- own and operate, re-opened in March after 15-month, $12.5 million renovation
Currently under construction:
• 156-suite Springhill Suites Houston Intercontinental Airport, Houston, Texas Suites by Marriott-to open in early November.
• 110- Springhill Suites by Marriott, Bakery Square, Pittsburgh-secured $12.5 million loan, to open in 2010
• 124 - room Courtyard by Marriott Settler's Ridge, Pittsburgh - secured $13.4 million loan, to open 2010
• 124 Courtyard by Marriott, Meadow Lands, Pittsburgh - secured $10.8 million loan, to open in 2010.
Concord Hospitality Enterprises Company, an award-winning hotel management and development company based in Raleigh-Durham, N.C., manages 57 hotels with more than 7,000 guest rooms in 14 states and two Canadian providences.
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