ACORE Launches $1B Hospitality Rescue Fund
The firm plans to originate and acquire structured hotel debt investments across the US.
Global credit manager ACORE Capital has raised $1 billion to launch a hospitality-focused rescue capital fund, marking the latest entrant into such investment strategies for the troubled hotel sector.
ACORE Hospitality Partners will focus on providing North America hotel operators with rescue capital to weather the ongoing COVID-19 storm. It plans to originate and acquire structured hotel debt investments, including senior and mezzanine loans, B-notes and preferred equity, and will invest across the asset class, from high-end luxury resorts to smaller limited-service hotels. AHP will focus on assets in high-barrier markets, the company said.
ACORE has originated over $4.2 billion of hospitality investments since 2015.
“The pandemic has had a disproportionate and historic impact on the lodging industry leading to unprecedented distress and liquidity issues for hotel owners,” said Warren de Haan, managing partner at ACORE, in a statement. “We formed ACORE Hospitality Partners to solve this liquidity crisis by providing hotel owners with the capital they require to continue operations and keep people working.”
Rescue capital funds like AHP are becoming more prominent as the pandemic wears on and cash reserves run dry for many borrowers in the space and operating expenses mount. In September, for example, Driftwood Capital launched a new mezzanine lending fund to source mezzanine loans and preferred equity transactions in the hotel sector.
Less defaults have occurred for hotels over the past year, thanks in large part to the rescue capital available in the market.