Flynn Properties, Värde Partners Acquire Stake in 89-Asset Hotel Portfolio

Flynn Properties and Värde Partners have acquired an 80% joint venture interest in 89 select service and extended stay hotels in a deal whose implied total enterprise value is $1.1 billion. The sellers are affiliates of Highgate and Cerberus Capital Management, L.P. 

The portfolio, which is spread across the US, consists of 58 Marriott-branded hotels, 24 Hilton-branded hotels, 4 Radisson-branded hotels, 2 IHG-branded hotels and 1 Choice-branded hotel, which will undergo capital improvements over time. Affiliates of Highgate and Cerberus will retain a 20% interest in the investment, and Highgate will continue to manage the properties on behalf of the joint venture. This is the second joint venture between Flynn Properties and Värde Partners; last year the partners acquired a portfolio of 20 Marriott- and Hilton-branded select service hotels from Apple Hospitality.

“The hotel sector continues to strengthen amidst a complex macro backdrop, demonstrating its ability to offer investors the potential for growing, inflation-protected cashflows,” said Tim Mooney, Global Head of Real Estate at Värde Partners, in prepared remarks. “As this cycle continues to evolve, we believe there will be further opportunities to invest selectively in high-quality assets that are well positioned to capitalize on the robust demand for business and leisure travel. “

Deutsche Bank Securities Inc. served as financial advisor to Flynn Properties and Värde Partners on this transaction.