Executives with Hotel Equities believe the company’s partnership with global private equity firm Virtua Partners gives the company a unique position in the hotel industry.
ATLANTA—Global private equity firm Virtua Partners completed its merger with Hotel Equities in February, which executives said makes their company unique and well-rounded.
Virtua Partners raised more than $341 million in 2019 as part of its alliance to invest more than $500 million into Hotel Equities, with a large part coming from hospitality and opportunity strategic initiatives, according to a news release.
Brad Rahinsky, president and CEO of Hotel Equities, said this partnership has given his company an opportunity to increase the number of projects it is working on, and there’s no defined number as to how many.
Hotel Equities has an “extremely healthy pipeline of deals,” and has a very disciplined approach in terms of deals, he said. When it comes to deals, Rahinsky said Hotel Equities stress tests “against ’09 and ’10 numbers to make sure a deal could withstand that type of environment.”
In an interview with Hotel News Now in 2019, Hotel Equities Chief Development Officer Joe Reardon said the strategic alliance with Virtua Partners puts the management company in a different position.
“Now we have ownership in about 25% of our assets, and we’d like to see about 50% ownership at some stake, and 50% on the management side,” he said.
Through the $341 million raised, Virtua Partners secured $30 million in non-recourse construction loans to finish construction on Hotel Equities’ Courtyard by Marriott in Winston-Salem, North Carolina, and to complete its new-build SpringHill Suites by Marriott in Avondale, Arizona, the release states.
The company also secured $7.2 million in acquisition financing to purchase a Fairfield Inn & Suites in Colorado Springs, Colorado.
Rahinsky noted the combination of Hotel Equities with a capital arm is a “unique and powerful engine” providing a “one-stop shop” for partners in the hotel industry.
In the release from February, Reardon shared Rahinsky’s sentiment by saying, “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.”
“Our current owners have yet another resource within Hotel Equities for restructures, mezzanine debt and joint venture deals, which strengthens our partnerships within the hotel owner community,” he said.