Kimpton Group closes fourth hotel fund

The San Francisco-based firm has garnered $203 million in equity commitments on behalf of its KHP Fund III, which will be used to target hotel properties in North America.

Kimpton Group Holding, the parent company of hotel and restaurant firm Kimpton Hotel & Restaurant Group, has closed its fourth real estate fund and its third fund within the Kimpton Hospitality Partners series.

According to a statement, Kimpton Hospitality Partners (KHP) Fund III has closed on $203 million in equity commitments. With leverage, the San Francisco-based hospitality investment firm plans to acquire $500 million worth of potential hotels over the next three years on behalf of the vehicle.

In line with the prior two KHP funds, Kimpton will acquire non-hotel buildings that can be converted into Kimpton hotels or existing hotels that can be repositioned as Kimpton hotels. It also can use the capital to build new boutique hotels in targeted urban and resort areas in North America.

Kimpton already has acquired one property on behalf of KHP Fund III: The Mulberry Inn, a 145-room hotel in downtown Savannah, Georgia. The property, which was converted into a hotel in 1982, is owned through a joint venture between KHP Fund II and KHP Fund III. It will undergo a major renovation in the latter half of 2013 to convert it into a Kimpton hotel. 

“Raising capital for real estate investment has been more challenging than ever over the past few years,” said Kimpton’s chief executive Mike Depatie in a statement. “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.”

Since January 2012, Kimpton 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. Kimpton also 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.

Acquisitions on behalf of KHP II include the Hotel Monaco Philadelphia, which opened in October and previously was an office building; the Hotel Palomar in Washington DC, which formerly was a Radisson; and the Hotel Wilshire in Los Angeles.

Kimpton's first fund, the $122 million Kimpton Development Opportunity Fund, was established in 1997 and acquired and developed nine properties. The three subsequent KHP Funds, the first of which closed in 2005, have been raised to acquire, develop and redevelop boutique hotel properties in select major metropolitan cities and resort areas across North America.