Two months after closing its fifth flagship hospitality fund, Noble Investment Group has named a new managing partner to help pounce on its next crop of opportunities.
Angela Johnson joined the Atlanta-based firm this month in the new role of head of global client solutions and strategic partnerships. She is reporting directly to firm CEO Mit Shah and is now a member of Noble’s investment committee. She was most recently partner and head of capital formation at proptech venture capital firm Fifth Wall. Now at Noble, Johnson will focus on scaling and cultivating new investment opportunities emerging in the hospitality sector, driven in part by robust travel across the US.
She noted that corporate travel demand is nearing pre-pandemic levels. “We’re expecting that to be close to 95 percent in 2024, so you’re going to see increasing demand, but limited supply,” Johnson said.
Loan maturities in the hotel sector are expected to be another driver of opportunities. “There’s a lot of talk around the maturity wall; if you look at all the hotel loans out in the market today, about 20 percent are scheduled to mature within 2024,” Johnson told PERE.
“If you are a specialist in the lodging space, and you can provide creative solutions to many of these distressed borrowers, this can be a really interesting opportunity, not only from an equity perspective, but also from a debt perspective, and also looking at public and private markets.”
Noble announced the final closing for Fund V in January, which was oversubscribed at $1 billion. The fund focused on value-add investments in select-service and extended-stay hotels across the US.
Johnson said Noble’s closed-end funds have mainly focused on value-add, opportunistic and core-plus strategies, but fresh opportunities will come from new ways to invest across the capital stack, and in new approaches at the intersection of hospitality and living.
She said from an asset perspective, many hotel owners depleted their reserves throughout the pandemic. Now, like many, she is expecting the freeze on transactions to begin to thaw.
“We do think this is going to be a generational buying opportunity within the hotel space,” she said. “I think that’s where you’re going to start seeing more headlines and hearing more news about the transaction window really reopening in this space.”
Still, she agreed this is one of the most difficult fundraising environments she has seen in nearly two decades in real estate. Last year was the worst year for private real estate investing since 2012, but sector-specific strategies appear to be having something of an easier time capital raising than diversified funds, as PERE explored in this month’s cover story. PERE data shows 73 percent of sector-specific funds closed met or exceeded their target size in 2023, compared with only 64 percent of diversified funds.
Johnson said Noble will be able to capitalize upon such a fundraising environment. “Groups are going to want to look for completion strategies, areas where they can overweight exposure, where they think there are going to be some structural tailwinds, like those in hospitality,” she said. “That is an area where Noble’s going to be very differentiated, and where a lot of the institutional investors will look and seek the sector specialists.”
Her decision to leave Fifth Wall was driven by the opportunity to return to the hotel sector, having begun her career at RLJ Development, now RLJ Lodging Trust, she said. New York-based Fifth Wall led PERE’s Proptech 20 last year, with those firms cumulatively raising $11.28 billion over a rolling five-year period. It was only a slight increase of 13 percent, per PERE data, after nearly doubling in 2022.
“It was a challenging fundraising year across all asset classes,” Johnson said. “I still am a strong believer in proptech. Noble, for instance, is an early adopter of real estate technology and so I think that proptech is still going to be [at] the forefront of the minds of a lot of institutional investors as well as real estate institutional owners and landlords.”
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