SAN DIEGO, May 13, 1998 - Nomura Asset Capital Corp., the U.S. subsidiary of Nomura Investment Co., has purchased 35 percent of Hardage Suite Hotels, LLC for $81.5 million and is providing $405.5 million in construction, acquisition and permanent loan financing for an aggressive expansion of its upscale and highly regarded Woodfin Suite Hotels for business travelers.
Hardage, based here, plans to build one new Woodfin Suite Hotel a month over the next five years. Hardage, a property and development company, owns the hotels and other assets. Woodfin Suite Hotels, LLC is the service and operating company that manages and markets hotels under the Woodfin Suite and Chase Suite names.
Samuel A. Hardage, chairman and founder of Hardage, said the company will break ground on its first two new properties on May 14 and 15, respectively, in San Diego's burgeoning Sorrento Mesa technology area and Emeryville, in the San Francisco Bay area. The Woodfin Suite Hotel concept was developed after extensive prototyping and research among business travelers, predominantly from Fortune 1000 companies.
"We intend to be the premier all-suite hotel for the business traveler in the 21st Century," said founder and chairman Samuel A. Hardage. "We'll build new properties at the rate of about a dozen a year. But we are also actively looking at existing portfolios of suite hotels that we can purchase and convert to a Woodfin or Chase suite hotel." The hotel company currently has about $300 million in assets and foresees topping $1 billion within several years.
Woodfin Suites are upscale, all-suite hotels designed to appeal to business travelers who typically stay at traditional, full-service hotels. The hotels provide a large, two-room suite with kitchen and a full range of amenities that cater to the corporate traveler.
"By de-emphasizing certain amenities that are less important to business travelers, such as large lobbies and multiple foodservice operations, and concentrating on what they do want, our hotels can provide an upscale experience at lower cost," said Hardage.
Woodfin Suites was ranked second among the top extended-stay chains in a recent comparison by Business Travel News.
Nomura Asset Capital, headquartered in San Francisco, has financed about $7 billion worth of hotels in the past five years. It was one of the first investment firms to return to the hospitality industry following its resurgence in the mid-1990s.
"We were attracted to Hardage and Woodfin by its excellent track record in generating revenues, even during difficult years," said Dan Abrams of Nomura. "The company has high-quality assets and management. Its industry niche -- high-end, limited service hotels -- is particularly attractive because of limited competition and potential for rapid market share development."
Woodfin Suite Hotels has grown even through recent recessions in the hospitality industry, profiting from high customer satisfaction ratings and a strong perception of value to its guests, who are primarily business travelers. Aggressive management systems and a belief in strong marketing based on customer preferences have allowed Woodfin Suite Hotels to consistently outperform competitive hotel properties.
In Sorrento Mesa, the Woodfin Suite Hotel will reap the advantages of the burgeoning technology community that dominates the area. The hotel will include corporate meeting facilities, a 24-hour business center and other amenities.
"Demand for office, high-tech and light industrial space in this area is expected to outpace supply in future years," said Hardage. "The area currently leads the county in new office construction."
In Emeryville, the hotel will focus on extended-stay customers with a facility that includes upscale amenities that offer the feel of a luxurious apartment rather than a high-rise hotel. By investing more heavily in such guestroom improvements, the Woodfin product provides a superior price/value relationship for guests that drives customer satisfaction ratings. The hotel will benefit from Emeryville's aggressive redevelopment effort, which has transformed the area from primarily an industrial neighborhood to a diversified, progressive community.
Hardage Suite Hotels was founded in 1982 by Hardage, who played an important role in the development of the all-suite concept and was the first franchisee of Residence Inns. Woodfin Suite Hotels are currently located in California, Maryland and Ohio. Future properties will include a number of other states plus four hotels being developed in Poland.