TORONTO—Shifting from its usual focus on the “four core” real estate investments, Brookfield Asset Management has made its foray into the lodging sector with its just-announced acquisition of Thayer Lodging Group Inc. The hotel investment company will now operate as a subsidiary of locally based Brookfield, continuing to focus on investment management, asset management and property management businesses. The value of the transaction was not disclosed.
Thayer president Bruce Wiles will continue to run the operations and oversee employees. Leland C. Pillsbury and Fred V. Malek, Thayer's co-founders and chairmen, will serve as co-chairmen & co-heads of Global Lodging of the new company and as senior advisors to Brookfield. In all, some 20 Thayer employees will be taken into Brookfield's fold.
Pillsbury calls the deal “the capstone of a quarter-century of growth and a clear signal that the best days for investing in global hotel real estate are yet ahead.” In Brookfield, he adds, “we have found a partner that shares our optimistic view of the acquisition market for full-service hotels in major markets worldwide, and provides access to an ongoing source of capital.”
While Annapolis, MD-based Thayer now has Brookfield's financial backing, the transaction gives Brookfield a hotel investment management business built on 25 years of success. Since forming its first private equity fund more than two decades ago, Thayer completed 43 hotel investments with a total acquisition cost of approximately $2.5 billion. Notably, Thayer formed a joint venture 10 years ago with Jin Jiang Group, China's largest hotel and hospitality company, and in 2010 the duo acquired Interstate Hotels and Resorts. It was the largest third-party, independent hotel manager in the word, with some 27,000 employees, 400 hotels, annual sales of over $2.7 billion and $10 billion of assets under management in Europe, Asia and the US.
The deal combines two firms with similar investment objectives, management approaches and a common outlook on the global real estate market, relates Malek. “We're pleased that Brookfield sees in Thayer a portal to attractive real estate investment opportunities, a proven value-added operating partner and a profitable operating platform.” As for Thayer, expect to see business as usual—“acquire hotel real estate below replacement cost, and aggressively increase NOI by increasing market share, managing channels of distribution and controlling costs."
Brookfield and Thayer representatives did not respond to queries by press time. Watch GlobeSt.com for an update on this story.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Sule Aygoren
Aygoren oversees the editorial direction and content for ALM’s Real Estate Media Group, including Real Estate Forum and GlobeSt.com. In her tenure with ALM, she’s held roles of increasing responsibility, including Managing Editor. Aygoren has received several awards for her coverage including Best Trade Magazine Report from the National Association of Real Estate Editors and the James D. Carper Award for Young Journalists. Under her direction, Forum has received four national NAREE awards for Best Commercial Real Estate Trade Magazine.
