HEI beefs up

Ted Darnall, a veteran of Starwood Hotels, has joined the hospitality-focused firm as a partner and will help invest its $425m second vehicle.

Ted Darnall, formerly the real estate head at Starwood Hotels & Resorts, recently joined Norwalk, Connecticut-based HEI Hospitality, which plans to acquire $1.5 billion (€1.2 billion) in hotels over the next three years, as a partner.

Before joining HEI, Darnall served as president of the Real Estate Group at Starwood Hotels & Resorts Worldwide, where he oversaw asset management, W Hotels development, Starwood joint-venture management, acquisitions and development, franchise development, construction management, new product development and real estate planning. He was reportedly key in the development of the recently launched aloft and Extended Stay by Westin concepts, which could provide HEI with an inside track to develop the Starwood brands. Darnall joined Starwood as chief operating officer in 1996.

Darnall said part of what attracted him to HEI was his familiarity with both the firm as a top operator and Gary Mendell, HEI's founder, who sold a previous company called HEI Hotels to Starwood. In a recent interview, Darnall didn't rule out HEI throwing its hat in the ring to develop some of the new Starwood concepts. The firm already manages some hotels that fall under Starwood flags.

“Ted's broad expertise in development will be valuable from underwriting through closing,” said Steve Mendell, HEI's executive vice president of acquisitions and development, in a statement. “His renovation and hands-on operations experience will help us achieve superior guest satisfaction and returns on each new and existing property in our growing portfolio.”

Recently, HEI acquired the 288-room Embassy Suites in Center City Philadelphia for an undisclosed sum and is planning a $10 million-renovation. The hotel represents the fourth property purchased by the private equity real estate firm's $425 million second fund. The firm is seeking opportunities in the top 50 metropolitan areas in the US.

Other acquisitions made for the second vehicle include the Crowne Plaza at San Antonio Riverwalk in Texas; the Embassy Suites in Irivine, California; and the Park Hyatt in San Francisco.

Merritt Hospitality, a wholly owned subsidiary of HEI, provides management for the properties. The firm is the tenth largest hotel management firm in the US, according to its website.

Darnall also recently brought in William J. Scanlon, a 16-year Marriot veteran, as senior vice president of sales and marketing at Merritt. He will be responsible for maximizing revenues at the company's expanding portfolio of upscale hotels.

HEI closed its first vehicle on $275 million in May 2004. The second fund closed in February 2006.

Apollo hires Simmons
Paul Simmons has joined New York-based Apollo Real Estate Advisors as a partner responsible for acquisitions and business development. He will focus on opportunistic acquisitions and development in both the US and Mexico. He was previously a managing director at GE Commercial Finance Real Estate, where he served as head of the firm's North America retail equity group, risk manager for GE's capital markets business in New York and risk manager for Mexico and Latin America. Mexico is a market where Apollo sees “great potential,” managing partner Richard Mack said in a statement. Apollo closed it fifth fund on $700 million (€545 million) in March and closed its second dedicated European vehicle last year on $600 million.

GE alum forms Charles Street
Jerry Quill, a former GE Real Estate managing director, has formed Charles Street Capital, an investment company focused on commercial real estate opportunities in the United States and Canada. At GE Real Estate, Quill was responsible for loan acquisitions, joint ventures and M&A transactions. Charles Street's initial investment vehicle targets the acquisition of loans from existing real estate lenders in the secondary market, including banks, insurance companies, and government agencies. Quill and his team have been involved with more than $2.4 billion (€1.9 billion) of transactions since 2002. “We see a major opportunity in the U.S. debt market, specifically purchasing assets from lenders that have grown their portfolios rapidly over the past few years and have a need to reduce or rebalance real estate exposure,” Quill said in a statement. The firm will invest in multiple sectors, including subperfoming and nonperforming loans.

Pratt joins Benchmark
New England real estate veteran Fred Pratt, who founded the Boston Financial Group and once served as chief executive officer of Lend Lease Real Estate Investments US, has been named president of Benchmark Assisted Living. He will oversee day-today operations at the company's 43 senior living communities, and “spearhead new strategic endeavors,” which may include expansion of the company through acquisitions and or new development. Pratt has been a longtime member of Benchmark's board prior to joining the firm's management team. He currently serves on the advisory boards of Municipal Mortgage & Equity, a publicly traded real estate company, and the Massachusetts Institute of Technology's Center for Real Estate.

JT Partners adds ABP pro
Placement agency JT Partners has reportedly added Gena Cheng as chief operating officer and director of the firm. She was formerly with ABP Investments US, the US arm of the Dutch pension fund. JT Partners was recently formed by Peter Finley and Mitchell Sikora with support from Apollo Real Estate Advisors and Ramius Capital.