Noble Investment Group and Hyatt Hotels Corporation (NYSE: H) affiliates have formed a joint venture to invest up to $80 million in the strategic new development of hotel suites of Hyatt Place and Hyatt Summerfield.
Noble owns 60% of the joint venture and Hyatt’s affiliate has 40%. Noble will invest up to $48 million in new Hyatt-branded select service development projects.
Founded in 1993, the Noble organization specializes in the lodging and hospitality real estate sector. Through its private equity real estate funds, Noble has invested more than $1.7 billion in hotels and resorts throughout the United States and the organization’s current discretionary private equity fund represents $310 million of equity commitments.
Additionally, a Hyatt affiliate sold six Hyatt Place and two Hyatt Summerfield hotel suites to the joint venture for $110 million. The joint venture will invest $5 million to renovate the eight properties, which its affiliates will manage under franchise agreements with Hyatt. Noble now manages twenty-one full and select service Hyatt-branded hotels.
Mark Hoplamazian, President and Chief Executive Officer for Chicago-based Hyatt, said: “This transaction illustrates our willingness to use capital invested in existing hotels to expand our market presence. Strengthening our representation in the select service segment is a top priority for Hyatt as it helps to enhance our ability to serve our corporate customers.
“Moving forward, we will continue to apply our resources – management expertise, creativity and capital – in ways that advance that goal and contribute to the success of the venture.”
Steve Haggerty, global head of real estate and development for Hyatt, added: “Noble is one of the lodging industry’s most respected owners and developers and we are delighted to expand our relationship with them to continue the momentum in the growth of Hyatt’s select service brands in North America.
“The structure of this joint venture will enable us to increase our select service presence in markets where our customers are traveling, even in an environment in which construction financing for new hotel projects remains scarce.”
The joint venture pursues several new development opportunities, the first of which will be located in Atlanta’s Cobb Galleria area. Construction of the hotel suites is expected to begin later this year on a 149-room Hyatt Summerfield Suites hotel in the Overton Park mixed used office complex. The hotel is slated to open in 2013.
“Noble is a strong believer in the leadership team at Hyatt and we are enthusiastic about the strategic investment opportunities we have together,” said Mit Shah, senior managing principal and chief executive officer for Noble Investment Group.
“Hyatt Place and Hyatt Summerfield Suites are leading upscale brands and, along with our ability to enhance the acquired portfolio of eight hotels, we believe adding targeted new developments in prominent markets will create significant value for both of our organizations.”
The six Hyatt Place hotels and two Hyatt Summerfield hotel suites acquired by the joint venture are Hyatt Summerfield Suites Boston Waltham, Hyatt Summerfield Suites Miami Airport, Hyatt Place Atlanta/Perimeter Center, Hyatt Place Fairlawn/Paramus, Hyatt Place Fort Worth/Cityview, Hyatt Place Fort Worth/Hurst, Hyatt Place Minneapolis/Eden Prairie, and Hyatt Place Princeton/Carnegie Center West.
Hyatt Summerfield Suites are upscale, all-suite, residential-style hotels offering travelers spacious, contemporary studio, one- and two-bedroom suites ideal for any length of stay. Features include complimentary full breakfast buffet, evening socials, a guest market, laundry facilities and a business center.
Launched in 2006, Hyatt Place brings to the upscale select-service hotel category the authentic hospitality for which Hyatt is known. Inspired by multitasking travelers’ 24/7 lifestyle, Hyatt Place combines stylish design and practical amenities with forward-thinking technology and purposeful service.
Hyatt Place hotels feature complimentary Wi-Fi access, complimentary continental breakfast, a StayFit@Hyatt fitness center, a coffee and wine bar serving specialty coffees and premium wine and beer, and a Grab ’n Go case stocked with freshly made sandwiches and salads.
Guest Kitchens offer made-to-order breakfast, lunch and dinner entrées around the clock. Specially trained gallery hosts offer assistance with everything from directions to check-in to a freshly made meal.