Mingtiandi

Asia real estate and outbound investment news

  • Facebook
  • LinkedIn
  • RSS
  • Twitter
Sign Up / Login Logout

Lost your password?
Register
Forgotten Password
Cancel

Register For This Site

A password will be e-mailed to you.

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

ARA Enters US Market With Purchase of 38 Hyatt Hotels

2018/12/03 by Vincent Morkri Leave a Comment

John Lim ARA

John Lim’s ARA chose hotels for its first US acquisition

Singapore-based real estate fund manager ARA Asset Management announced on Monday that it had purchased a portfolio of 38 Hyatt-branded hotels in the United States from a unit of Lone Star Funds at an undisclosed price, marking ARA’s first foray into the American hotel market.

According to industry consultants, ARA is acquiring a portfolio of Hyatt Place and Hyatt House hotels, that the Chicago-based hotel firm had sold to a unit of Lone Star for $590 million in November 2014, with Lone Star refinancing the deal in 2017 and also completing a $55 million renovation of the 38 properties the same year.

The 38 mid-range hotels, comprising 4,950 rooms in 22 states but located primarily in the northeastern part of the US, had maintained their Hyatt branding under a franchise agreement between Hyatt and Lone Star, and will continue to be managed by hotel management specialists Aimbridge under the agreement with ARA.

Along with the hotel acquisition, ARA announced its establishment of a North American headquarters, in Dallas, Texas, with Jin Y Lee of real estate private equity firm Park Madison Partners joining the Singaporean firm to head up the new office.

Looking for High Yields in Mid-Range Hotels

In its statement, ARA expressed confidence in the potential yields on offer in the American hospitality sector, especially in “select service” hotels, which cater to budget-conscious business travelers. Lim cited the industry segment as having outperformed the traditional full-service hotel sector due to a simpler operating model and increasing demand by a growing number of local business travelers in the US.

Hyatt Place Albuquerque Airport

The Hyatt Place Albuquerque Airport is believed to be among the 38-asset portfolio

The hotels are located primarily in regional centres and second-tier cities in the US, such as Richmond, Virginia; Albuquerque, New Mexico, and Boise, Idaho with major hubs where real estate values are highest, such as New York, Chicago or California’s major cities unrepresented in the portfolio.

ARA, which traditionally acts as a fund manager making investments on behalf of REITs, funds or separate accounts under its management, said that the group was purchasing the Hyatt portfolio directly.

The company’s chief executive, John Lim, said ARA would look at injecting the Hyatt portfolio “into our growing REITs and private fund platforms in the near future as part of our multi-platform, multi-product global fund management strategy.”

Global Expansion Plan

The Hyatt purchase is part of ARA’s plan to expand its global footprint, although the company had earlier said the Asia Pacific region would remain its main focus.

Daniel Voellm, the Asia Pacific managing partner for global hotel consultancy HVS, said the ARA purchase represented a “direct bet on the US economy” and underlined a strategy focused on achieving steady yield streams from mid-market hotels, rather on acquiring trophy assets in major US cities. “It will be interesting to see the investment horizon for ARA and exit scenarios,” though, Voellm added.

In March of this year, ARA acquired a 19.5 percent stake in Australian real estate investment manager Cromwell Property Group for $317 million from a South Africa-based REIT. Cromwell, which also has extensive holdings in Europe, counts the global headquarters of Qantas airlines among the trophies in its Australian portfolio.

ARA also announced earlier this year a plan to target deals in Europe through a platform based in London under the leadership of veteran real estate financier Mark Ebbinghaus, who looks after the firm’s European desk in his role as senior advisor.

Chasing Hotels in the US

The Hyatt portfolio acquisition takes ARA, which has about $57 billion in assets under management in 20 countries, deeper into the hotel market than it has previously ventured.

The firm, which counts Li Ka-shing’s CK Hutchison Holdings, US private giant Warburg Pincus, and China’s AVIC Trust among its shareholders, has previously counted a total of three hotel assets — all in the portfolio of Hong Kong-listed Hui Xian REIT — among its investments.

In the US, however, the company is turning to Lee, who had nearly twenty years of experience in hotel investments in the US before becoming a principal at Park Madison Partners in 2016. Lee, whose office will lead ARA’s partnerships with Hyatt Hotels and Aimbridge Hospitality in this latest acquisition, also has previous experience with Thayer Lodging Group and HEI Hotels and Resorts.

Warburg Pincus and AVIC Trust teamed up with ARA’s Lim to privatise ARA in late 2016. The partnership said at the time that it was making the move based on the potential for accessing Chinese capital and business opportunities.

Related Stories

  • Wanda Waves Bye Bye to Sofitel, Hyatt and Hilton in Quest to Build Own Hotel BrandWanda Waves Bye Bye to Sofitel, Hyatt and Hilton in Quest to Build Own Hotel Brand
  • 70% of Investors Eager to Invest in APAC Hotels This Year Says JLL70% of Investors Eager to Invest in APAC Hotels This Year Says JLL
  • Singapore’s CDL Predicts 2020 Loss, Further Hotel Woes Next YearSingapore’s CDL Predicts 2020 Loss, Further Hotel Woes Next Year
  • Singapore’s Eagle Hospitality Trust Defaults on Texas Hotel LoansSingapore’s Eagle Hospitality Trust Defaults on Texas Hotel Loans

Share this now

  • LinkedIn
  • Share
  • Tweet
  • Email

Filed Under: Finance Tagged With: ARA Asset Management, Featured, Hotels, Hyatt Hotels, Jin Y Lee, John Lim, weekly-sp

Logistics Forum

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Knight Frank AU - Wentworth St

Get Mingtiandi Delivered

Office Investment

MTD TV

MTD TV data centre panel

Blackstone, Actis Predict Continued Growth for APAC Data Centres on MTD TV

Proptech Forum: Logistics Tech

Logistics Experts Reveal How Tech Is Reshaping Asia’s Distribution Centres

More MTD TV Videos

Latest Stories

Albert Yeung Emperor International

Blackstone Buys Kowloon East Building From Emperor Group for $65M

RFR-Vanke Midtown Condominium Project in Manhattan

Vanke Manhattan High-Rise Risks Foreclosure as ICBC Files New York Lawsuit

close to universities like University College London and universities like St Martins College Art and Design

Mapletree Explores US$1B Student Housing REIT IPO and More Asia Real Estate Headlines

Sponsored Features

Tony Horrell

Colliers’ Global Investor Sentiment Report Anticipates Up to 50% Surge in Investment in 2021 Sponsored Feature

Andrew-Slevin-John-Foord (4)

Insurtech to Help Address Underinsurance Across Asian Real Estate Assets in 2021 Sponsored Feature

CK Lau

Asia Pacific Logistics Sector: Increasingly Varied Sector Requires Multiple Approaches Sponsored Feature

More Sponsored Features>>

MTD-QR-Code-320

Top Stories

PGIM Real Estate Buys Office Building on Singapore’s Robinson Road for $107MPGIM Real Estate Buys Office Building on Singapore’s Robinson Road for $107M

Blackstone Buys Kowloon East Building From Emperor Group for $65MBlackstone Buys Kowloon East Building From Emperor Group for $65M

Grosvenor Latest Global Investor to Back Taronga Real Estate Tech FundGrosvenor Latest Global Investor to Back Taronga Real Estate Tech Fund


Connect with Mingtiandi

  • Facebook
  • LinkedIn
  • RSS
  • Twitter

Real Estate News

  • Capital Markets
  • Events
    • 2021 Mingtiandi Event Calendar
    • Join the Mingtiandi Multi-Family Investment Forum 2021
    • Join the Mingtiandi Logistics Real Estate Forum 2021
    • Join the Mingtiandi Sustainable Real Estate Forum 2021
    • Join the Mingtiandi Data Centre Forum 2021
    • Join the Mingtiandi Office Strategies Forum 2021
    • Join the Mingtiandi Proptech Forum in November
    • More Events
  • MTD TV
  • People
  • Logistics
  • Asia Outbound
  • Retail
  • Design & Construction
  • Research & Policy
  • Advertise

More Mingtiandi

  • About Mingtiandi
  • Contact Mingtiandi
  • Newsletter Subscription
  • Terms of Use
  • Privacy
  • Advertise
  • Join the Mingtiandi Team