GlobeSt.com: How has life changed since you went public?

Bennett: It's very interesting. We've enjoyed being in the public arena. We've heard a number of people who weren't too happy with it, and essentially they had warned us against it. But we've found it enjoyable so far, and we hope it keeps up.

GlobeSt.com: What was the essence of their warnings?

Bennett: Primarily the concerns were around the amount of scrutiny and the amount of work involved. But we knew all of that. We've had some great partners over the years who would put up the majority of capital in the hotel deals we'd do and we'd get a lot of scrutiny from them. The level of scrutiny in the public markets is no more than it was with those partners.

GlobeSt.com: So let's review the numbers.

Bennett: The original IPO raised approximately $200 million, and there was about $50 million worth of properties that were contributed. At this point, we've got $384 million closed or committed.

GlobeSt.com: What's the distribution of those assets?

Bennett: We want to focus on direct hotel investments, mezzanine loans secured by hotels, first-mortgage loans secured by hotels and sale/leasebacks. At this point in what we see as the early stage of the lodging recovery, the best spot is in direct hotel ownership and in mezzanine loans. We've told our investors that, at least initially, we're going to devote 60% to 80% of our capital to direct investments and the balance to mezzanine. Right now, of what we've closed or committed, the ratio is 80% direct hotel investments and 20% mezzanine loans.

GlobeSt.com: How has the lodging climate changed since you launched?

Bennett: Let's talk about the mezzanine loans first. We saw spreads tightening in the summer and through the end of last year. Then they stopped, and they've remained at the same levels since. Meanwhile, the competition for hotel properties has seen a pretty steady build-up. It's interesting, though; there's been a lull in the marketplace over the past couple of months. It's not as competitive. This could be a blip or a new trend. We'll have to see.

GlobeSt.com: Where are you finding the richest brick-and-mortar opportunities?

Bennett: We're pursuing a geographically diverse strategy. Typical REIT investors like their dividends to grow consistently. But direct investments are an asset class with a sizable variation in earnings. Our answer to that dilemma lies in our strategy to invest in all of those groups I mentioned. But even in the individual components of direct investments we're seeking diversity as well. And we want it that way in terms of both geography and service levels--we like to pursue both select service and full service assets. The specific opportunities are really deal-by-deal. But those assets in A-plus locations--well-branded and in good physical shape--command steep prices, to the point that we choose not to splurge shareholder capital on them. We just don't see the returns.

GlobeSt.com: What's your hold?

Bennett: The REIT laws generally require you to hold at least for four years, but it depends on the asset. Some we plan to hold for many years, and some not too long beyond that window.

GlobeSt.com: Despite all those warnings you mentioned, why the big movement toward IPOs in the past year?

Bennett: It's certainly been the trend on the hospitality side. We've seen a number of filings just this spring. The capital markets had been closed to hotels for quite some time; the industry had been beaten up for some time and performance was low. It's become a generally favorable environment to buy hotels, and considering the interest-rate environment we're in--even if it does change somewhat--it's attractive and the fundamentals are strong. I believe the industry as a whole will continue to see positive fundamentals for the foreseeable future.