Bridlie will invest the funds on behalf of the private equity firm, pursuing acquisitions of upscale, full-service and selected premium-branded hotels and resorts in major metropolitan and urban markets throughout the United States. Deals will range from $14 million to $75 million.
Bridlie declined to name its capital partner. "One of the non-negotiable issues we faced when arranging this joint venture was to invest their capital while ensuring the group remained anonymous," says Shelley Rapier, vice president of sales and marketing for Bridlie Hospitality Management. "This particular group does not wish to be pursued by other organizations who are also seeking JV funding at this time, so our agreement with them includes a non-disclosure of their identity on a public level."
Bridlie, which provides full management oversight services for Carefree Resort & Conference Center in Carefree, Ariz., will target its investment capital on distressed, neglected assets, but will also consider assets that are distressed because of debt issues.
"We focus our energy and talent primarily on identifying assets in urban markets which have been neglected and suffered financial shortfalls due to product and quality issues due to lack of capital," Rapier says. "We have also looked at assets that were overleveraged to begin with or have suffered an unfavorable change in loan to value ratios primarily as a result of the downturn in the last few years as a result of the economic conditions on a national level."
Rapier tells GlobeSt. that Bridlie will make the majority of its acquisitions on an all-cash basis. "One advantage we feel we will have in today's market is cash and the ability to close a transaction in a short time frame," she says. "However we also look at leveraging certain assets."
Rapier adds that in past transactions the company has limited its leverage to 65 percent loan-to-value. It also becomes a JV partner in each transaction using a portion of Bridlie's funds for the acquisition and the balance coming from the JV fund.
Bridlie is primarily interested in one-off transactions. "We are seeking individual assets which require unprecedented turnaround in order to be successful, and unfortunately, large or even small portfolios often include assets we would not be interested in acquiring unless we were confident that a portfolio acquisition would allow an immediate spin-off of those assets we were not confident in providing dramatic ROI results in a very short period of time," Rapier explains.
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