Kimpton Group Holding Closes $203 Million Hotel Investment Fund
Boutique leader’s fourth discretionary investment fund will be used to acquire more than $500 million in hotel real estate
Kimpton Group Holding LLC, the parent company of Kimpton Hotel & Restaurant Group, LLC, the largest player in the boutique/lifestyle hotel segment, has announced it has closed its fourth institutional real estate fund and its third fund within the Kimpton Hospitality Partners series. KHP Fund III, L.P. ("KHP Fund III"), has $203 million in committed equity capital with the goal of acquiring more than $500 million worth of hotels over the next three years.
Today, Kimpton is a fully integrated hotel and restaurant company with its proprietary Kimpton brand, an experienced operations team, in-house development expertise and a national acquisitions team. In addition to its fund acquisitions, Kimpton provides management services to owners of boutique hotels throughout North America, with approximately three-quarters of its portfolio third-party owned.
"Raising capital for real estate investment has been more challenging than ever over the past few years, which is why we are especially proud to announce the close of this new fund," said Kimpton CEO Mike Depatie. "The discretionary nature of our fund provides us a distinct advantage in acquiring properties because we are able to offer sellers and developers a quick and certain close, something that few others can match."
In line with the first two KHP funds, KHP Fund III will follow a multi-pronged strategy for making new investments:
- Acquire non-hotel buildings that can be converted to Kimpton hotels, including "adaptive reuse" projects, such as KHP II's new Hotel Monaco Philadelphia that opened in October 2012 in the city's historic Lafayette building, which was previously an office building.
- Acquire existing hotels that either fit the Kimpton model, such as the recently added Hotel Wilshire in Los Angeles (also a KHP II acquisition) or properties that are underutilized and where opportunities exist to reposition them as a Kimpton hotel, such as the Hotel Palomar in Washington, DC (formerly a Radisson).
- Build new boutique hotels in targeted urban and resort areas in North America.
"Over the past eight years, we have built a solid track record with the KHP funds, acquiring excellent assets that meet our investment goals, while continuing to build and expand the Kimpton brand as well," said Depatie.
KHP Fund III has already acquired a property in Savannah Georgia – The Mulberry Inn, a 145-room hotel in downtown Savannah, located in an historic site that once housed a livery stable, a cotton warehouse and later a Coca-Cola bottling plant. The property was converted into a hotel in 1982. The Mulberry Inn is owned in a joint venture between KHP Fund II and KHP Fund III, and will undergo a major renovation in the latter half of 2013 to convert into a Kimpton hotel.
Savannah's Mulberry Inn is just one in a series of new hotels Kimpton has opened or announced in the past year. Since January 2012, the company has added seven hotels to its roster, including acquisitions of the River Place Inn in Portland, the Canary Hotel in Santa Barbara, the Hotel Monaco Philadelphia and the Hotel Wilshire in Los Angeles, along with management contracts for Washington, D.C.'s Donovan House, the La Jolla Hotel and the Hotel Palomar Phoenix.
Kimpton also recently announced it has won the management contract for two upcoming new hotels in San Antonio and Milwaukee, marking the third Kimpton hotel in Texas and the latest in the brand's longstanding history of adaptive reuse projects, and the first-ever Kimpton hotel in Milwaukee.
ABOUT KIMPTON HOTELS & RESTAURANTS
San Francisco-based Kimpton Hotels & Restaurants is a leading collection of boutique hotels and restaurants and the acknowledged industry pioneer that first introduced the boutique hotel concept to the United States. In 1981, Bill Kimpton founded the company that today is renowned for making travelers feel genuinely cared for through thoughtful perks and amenities, bold, playful design and a sincerely personal style of guest service. Out to help people live full, balanced lives, Kimpton aims to inspire with touches like yoga mats in every room, complimentary coffee and tea to start the day, hosted evening Wine Hour, in-room fitness programming and complimentary bike rentals. The award-winning restaurants and bars are led by talented chefs and bartenders that offer guests a chance to dine like a local.
Kimpton is consistently ranked as one of the top companies in the Market Metrix Hospitality Index, Upper Upscale Segment, for Customer Satisfaction. The company is highly-regarded for its innovative employee culture and benefits and has been named a FORTUNE magazine "Best Place to Work" seven times since 2009. Kimpton is continuously growing and currently operates over 60 hotels and 70 plus restaurants, bars and lounges in 30 U.S. cities. In January 2015, Kimpton was welcomed into the InterContinental Hotels Group (IHG) family of hotel brands, bringing together two special cultures and sets of values to create the world's largest boutique hotel business. For more information, visit www.KimptonHotels.com.