NORWALK, Conn., February 5, 2009 – Officials of HEI Hotels & Resorts,
the nation’s fastest growing private owner/operator of hotel real estate,
today announced plans to deploy up to $1.5 billion from its third fund,
HEI Hospitality Fund III, L.P., during 2009. The fully discretionary
fund has approximately $500 million in equity, and intends to acquire or
develop between $1.5 billion and $2 billion in hotels and resorts over
the next two years.
“We continue to actively seek hotels for our portfolio of full-service,
upper-upscale hotels in areas with high barriers to new development,” said
Steve Mendell, HEI’s executive vice president of acquisitions and development.
“For the first time in about 16 months, we are beginning to see hotel prices
come in line with market expectations as the expectation gap narrows between
buyers and sellers. We expect this trend to continue, with prices
becoming even more attractive as the year progresses. Since we do
have dry powder, we expect to be at the forefront of the acquisition wave,
which we expect to begin in the near future. Cash always is king
in this part of the real estate cycle, which we believe will give us a
competitive advantage, coupled with our ability to innovatively structure
transactions and our track record of closing quickly at an agreed-upon
The new fund will target full-service, upper-upscale and luxury hotels,
resorts and premium select-service hotels in the U.S., Canada and the Caribbean
affiliated with established leading brands. Desired locations include
downtown central business districts (CBDs) in urban, premium suburban and
airport sites. HEI also remains focused on complementing its property
portfolio with independent upper-upscale and resort properties located
in strong markets and select “takeout” opportunities to buy hotels upon
completion of construction from third-party developers.
Managed Funds: HEI Funds
HEI Hospitality Fund III, L.P. ("Fund III"), July 2008, is a
$515,350,000 discretionary private equity fund formed to acquire and/or
develop hospitality related assets. Fund III is comprised of leading institutional
investors and members of HEI's senior executive team.Similar to Fund I
and Fund II, Fund III is primarily focused on investing in full service,
upper upscale and luxury hotels across the U.S., Canada and the Caribbean.
HEI Hospitality Fund II, L.P ("Fund II "), February 2006, is
a $425,000,000 discretionary private equity fund formed to acquire and/or
develop hospitality related assets. Fund II comprises nine of the country's
most prestigious university endowments (including seven Fund I investors)
along with members of HEI's senior executive team. To date, Fund II has
invested or committed capital in 14 full service, upper upscale, luxury
hotels across the U.S. and the historic Equinox Resort & Spa in Manchester
HEI Hospitality Fund, L.P. ("Fund I"), May 2004, is a $274,300,000
discretionary private equity fund, formed to acquire full service, upper
upscale, luxury properties. Fund I comprises eight of the country's most
prestigious university endowments along with members of HEI's senior executive
team. To date, Fund I has invested in 12 full service, upper upscale, luxury
hotels across the U.S. and the famed Algonquin hotel in New York City.
HEI Prudential Joint Venture, August 2002, is a joint venture
comprised of Prudential Real Estate Investors and HEI. HEI is the operating
partner of the platform which owns 3 first class, full service hotels.
HEI has assembled one of the highest quality hotel portfolios in the
United States. Our portfolio is unique…comprised completely of full service,
upper upscale and luxury properties, all located in large metropolitan
markets and representing the world's leading brands.
The objective of our private discretionary funds is to own our hotels
for long periods of time. With this objective in mind, our funds provide
readily available capital for us to continually invest in our hotels, and
ensure we maintain the highest quality assets.
Completely full service, upper upscale and luxury portfolio
62% of hotels are in prime urban locations
World Renowned brands: Westin, Marriott, Hilton, Embassy Suites, Le Meridien,
Sheraton, Renaissance, Crowne Plaza
Irreplaceable collection of independent hotels and resorts
$190 million reinvested in hotel improvements - further enhancing our products
About HEI Hotels & Resorts
HEI Hotels & Resorts, headquartered in Norwalk, Conn., is a leading
hospitality investment firm that acquires, develops, owns and operates
full-service, upper-upscale and luxury hotels and resorts throughout the
United States under such well-known brand names as Marriott, Sheraton,
Westin, Le Meridien, Embassy Suites, and Hilton. For more information
about HEI, visit the company’s website, www.heihotels.com.