By Jon Peterson
Interest in some hotel properties has been very high in the last year or so, as the impact on the industry from the COVID-19 pandemic bifurcates the market into winners and losers. As a result, a number of institutional investors have jumped into the game in order gain a foothold in some of the most prominent markets across the country. Denver-based KSL Capital Partners is one such player, and the company has created a new hotel investment platform called Mission Hill Hospitality to acquire either select service and extended stay hotels across the country. One of its initial purchases was the acquisition of the 114-room Spring Hill Suites property in Truckee for $30.4 million ($266,667 per room), according to sources that track hotels sales throughout California.
KSL, through a company representative, declined to comment on the acquisition price for the asset in Truckee.
The transaction closed in June, according to industry sources, and the property, which has only been open for only one year, is located at 10640 East Jibboon Street.
There is a belief in the hotel industrial that select service and extended stay assets are attracting a good amount of investment capital at the moment. According to CoStar data, select service/extended stay hotel segment is the fastest growing one in the hospitality industry, accounting for roughly one third of all the transaction volume in the United States.
Mission Hill Hospitality has acquired one other West Coast hotel since the company was formed by KSL. This is the 125-room Hyatt House in Beaverton, Ore. located at 12820 Southwest Crescent Street. The purchase price on this property was not disclosed at the time of sale.
These two properties and 10 other assets have been acquired by Mission Hill over the last six month period, as stated by KSL in an email. The other properties include four hotels in Georgia, two in Florida and single assets in North Carolina, New Jersey, Massachusetts and Virginia, according to the Mission Hill website. The source of capital for these investments are a KSL-backed private equity fund, as stated by KSL in an email.
“Mission Hill Hospitality was created as a platform to focus on select service and extended stay properties and development opportunities in markets with strong long-term fundamentals and the potential to add value,” says John Edge, a partner with KSL in a prepared statement.
Mission Hill will be led by someone with whom KSL is familiar. Greg Kennealey, who has played a key role in driving value in KSL’s hotel investments for over a decade, has been chosen for that role.
“I am honored for the opportunity to lead Mission Hill Hospitality and greatly appreciate KSL’s confidence and support. KSL’s long history in hospitality investing provides a solid foundation as we launch the platform and actively grow the portfolio. We are building an experienced, dedicated select service team that can leverage relationships with owners, managers, brands and developers, allowing Mission Hill Hospitality to create the highest quality portfolio of hand-picked assets,” says Kennealey in a prepared statement.
Before creating Mission Hill, KSL was focused on full-serve hotels particularly in leisure destinations generally supported by a mass affluent consumer.