According to CBC News, the city of Calgary has announced its plans to convert three downtown towers into residential housing and hotel units.
Hotel Equities seeks ownership partners
ATLANTA, CALGARY — Hotel Equities’ Canadian team is 14 strong; they are looking for a Canadian SVP to be based in a new Toronto-area office; they’re now into financing and development; and are seeking the right Canadian ownership partners.
ATLANTA, CALGARY — Hotel Equities’ Canadian team is 14 strong; they are looking for a Canadian senior vice-president to be based in a new Toronto-area office; they’re now into financing and development; and are seeking the right Canadian ownership partners.
“We’re doing great,” Joe Reardon, chief development officer at the Atlanta-based hotel operator, told CLN. “We have had a lot of acquisitions with private equity, not just third-party management. We will continue to have a real focus on growth of the third party management side, but we are working with a couple of different groups as strategic investment partners.”
Hotel Equities has joined with Virtua Partners of Scottsdale, Arizona, officially merging with the company on December 30, 2019, although the relationship began two and a half years ago. “We have done 10 transactions in the past year and a half and are all working together now,” Reardon said.
“This allows us to not just do third party management, but to help folks put debt on their hotels. We can now put equity into deals or raise it. We have a $35 million mezzanine fund, which is the last piece of the capital set.”
Virtua Partners raised over $341 million in 2019. A significant portion of the total came from the firm’s hospitality and Opportunity Zone strategic initiatives. This milestone was made possible in large part as a result of the firm’s merger with Hotel Equities.
“Having a capital arm alongside Hotel Equities allows our firm to be more well-rounded as it relates to acquisitions, potential mergers and scaling our growth,” said Reardon. “Our current owners have yet another resource within HE for restructures, mezzanine debt and joint venture deals, which strengthens our partnerships within the hotel owner community.
“We have 10 projects [in the U.S.] and we are close to announcing a project in Canada,” Reardon said. “There are 20 more transactions in the works as we speak.
“We are currently looking for a strategic partner to come alongside and do investments in Canada — a company with the wherewithal to do some investments with us, a company that is deeply rooted [in Canada] and has some complementary assets, such as retail projects, single-family homes or offices. We are looking for a company that is well-rounded in a number of asset classes.”
Hotel Equities has an office in Calgary, and is currently looking for a location in Mississauga. “We now have 14 people in Canada, while in 2019, we just had three or four people. We have added a substantial amount of staff. I don’t know of anyone who has made a bigger financial [payroll] commitment to Canada.”
The Mississauga office will provide continued growth in Eastern Canada, Reardon noted, adding that they would be hiring a senior vice-president of Canada, probably based in Mississauga, to oversee the Canadian regional offices.
The number of third party managed hotels in Canada just keeps growing. Hotel Equities is now committed to managing 24 hotels here, 19 already built and five signed on new development projects. There are more on the way, said Reardon. One recent project is the Four Points Campbell River, B.C., where they are working with a First Nations group.
The addition of financing and development services has made Hotel Equities a more well-rounded company, Reardon noted, adding that he is excited about the owner/project manager component.
“We’re not stopping — and we absolutely love it,” he said. “The regional team in Canada is doing well. We’ve developed our strategy, checked the boxes, and I like the position we are in.”