Jones Lang LaSalle’s hotel and investment management arms, LaSalle Investment Management and LaSalle Hotel Properties, will target the toughest US hotel markets in a $250 million (€157 million) joint venture.
The two firms anticipate investments of up to $700 million with leverage, according to a statement. The JV will focus on high barrier-to-entry markets in the US, such as the Northeast and Pacific regions.
LaSalle Hotel Properties will own 15 percent of the venture and earn an incentive fee depending on returns. LaSalle Hotel Properties, run by chairman and chief executive officer Jon Bortz, will also acquire, manage and redevelop the properties over the life of the venture, expected to be up to seven years.
Bortz said the JV would help the hotel group diversify, while LaSalle Investment Management managing director Dan Witte said the vehicle would be “timely” given the current market dislocation.
LaSalle Hotel Properties, a real estate investment trust which is part of the Jones Lang LaSalle group, went public in 1998 with 10 hotel investments. The firm now owns 31 luxury hotels in 11 US markets including the Westin, Sheraton, Hilton and Hyatt brands.