Deals

Investcorp acquires $450m hotel portfolio

Alternative investment firm Investcorp has acquired nine US hotels for $450m—in addition to buying a single hotel in Milwaukee.

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The real estate arm of private investment firm Investcorp has acquired a 96 percent stake in the Procaccianti Hotel Portfolio for around $450 million (€331 million).

The portfolio, which will continue to be managed by the Procaccianti Group, is comprised of nine hotels in Illinois, Texas, Oklahoma, and Florida under the Marriott, InterContinental, Hilton and Starwood banners. Eight hotels have been acquired and the purchase of the ninth hotel is set to close this summer.

The Marriott Schaumburg, the Crowne Plaza and the Holiday Inn Express are located in Illinois; the Holiday Inn Select and the Marriott Palm Beach, are located in Florida; the Doubletree and the Marriott Waterford are located in Oklahoma; the Marriott Waterside is in Virginia; and the Westin DFW is located in Texas. In total, the portfolio has 2,828 rooms and 252,514 square feet of meeting space.

According to a statement, Investcorp will continue to look at the lodging sector. “Over the past eight months, we have acquired US hotel properties worth approximately a half a billion dollars, including this purchase of the Procaccianti assets and the acquisition of a Milwaukee property announced separately today,” said Investcorp principal Christopher Sameth. “We are looking to make additional hotel investments this year, including portfolio recaps and purchases, as well as single-asset situations.”

In an unrelated deal, the firm also acquired a Residence Inn in downtown Milwaukee for an undisclosed amount from an undisclosed seller. That hotel opened in 2001 and has 131 rooms.

Investcorp has more than $3.5 billion invested in the US property markets. The firm recently teamed up with Connecticut-based investment and advisory firm TriLyn and the Bank of Scotland to launch TriLyn-Investcorp Mezzanine Partners, a fund making mezzanine, high-yield debt and preferred equity investments in commercial and residential real estate in the US. The fund had a first close in January on $100 million, though Investcorp says the fund size has since been increased to $120 million.

Investcorp has offices in New York, London and Bahrain and is traded on the London and Bahrain Stock Exchanges. The firm has more than $10 billion in assets under management.