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Quanah Completes $100M Capitalization

DALLAS-Locally based Quanah Hospitality Partners LP will use the monies to acquire, develop and operate 15 Value Place extended-stay hotel properties.

By John McCloud | Updated on August 30, 2007

DALLAS-Locally based Quanah Hospitality Partners LP completed a $100-million capitalization to acquire, develop and operate 15 Value Place extended-stay hotel properties. The capitalization completes funding for the first phase of an ambitious five-year plan by the company to complete about 150 Value Place hotels in markets in Texas, New Mexico, Florida and Southern California.

Quanah CEO Gary Webb tells GlobeSt.com the program marks the entry of long-established parent company Quanah Partners LP into the hotel segment of the real estate industry. He says Quanah settled on the Value Place brand because of the success of its existing products. “Occupancies typically stay somewhere around 85% to 90%, which is phenomenally high for the industry,” Webb remarks. “The typical return to investors generally ranges from 12% to 14%. It’s a great investment.”

Value Place, which has 55 properties in operation and several dozen in development, caters primarily to business travelers and people in the process of relocation. Units rent from about $200 to $350 per week. According to Webb, the chain has sold more than 600 franchises in three years. He says properties have either 105 or 121 keys and cost from $5.5 million to $8.5 million to develop, depending on the market.

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