As part of the agreement, Seattle-based DHC will become a Strategic Alliance Member (SAM) with Barcelona REIT One (BR-1), a closed-end fund that will operate as a private REIT. As a SAM, DHC will co-invest with Barcelona and other investors to acquire hotels operating under leading, premium brands in the mid-market through upper upscale segments. Target acquisitions will be located in primary and secondary US and Canadian markets, according to Richard Harkin, president of Barcelona Hotel Group.
DHC will be responsible for sourcing acquisition opportunities and will operate as a third-party manager for all properties that it sources for the REIT. The hotels will be owned by BR-1, which is the first of several planned closed-end funds.
Harkin tells GlobeSt.com that BR-1 already has letters of intent out on acquisitions totaling $200 million to $250 million. The deals are expected to close in mid to late summer. "Most of these properties are purchase/leasebacks with the ownership company and perform at a current level so as to fully service the lease requirements," he notes.
Acquisition candidates will be properties that can benefit from Dow's turn-around and repositioning expertise. "We believe that the next several years will create exceptional opportunities to acquire hotels, reposition them and take advantage of an economic upswing," Harkin says.
Also as part of the agreement, Murray Dow, president of DHC, has been named to the Board of Directors of Barcelona Hotel Group, which was formed in 2009 by a group of former hotel industry executives in the finance and corporate arenas.
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