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Kimpton Closes $203M Hotel Investment Fund

Thursday February 28th, 2013 - 11:31AM

SAN FRANCISCO—Kimpton Group Holding LLC, the parent company of Kimpton Hotel & Restaurant Group, LLC, has closed its fourth institutional real estate fund and its third fund within the Kimpton Hospitality Partners series.

KHP Fund III, LP, has $203 million in committed equity capital with the goal of acquiring more than $500 million worth of hotels over the next three years.

“Raising capital for real estate investment has been more challenging than ever over the past few years, which is why we are especially proud to announce the close of this new fund,” said Kimpton CEO Mike Depatie in a statement. “The discretionary nature of our fund provides us a distinct advantage in acquiring properties because we are able to offer sellers and developers a quick and certain close, something that few others can match.”

In line with the first two KHP funds, KHP Fund III will follow a multi-pronged strategy for making new investments, according to the company: acquire non-hotel buildings that can be converted to Kimpton hotels; acquire existing hotels that either fit the Kimpton model or properties that are underutilized and where opportunities exist to reposition them; and build new boutique hotels in targeted urban and resort areas in North America.

KHP Fund III already has acquired a property in Savannah, GA: The Mulberry Inn, a 145-room downtown hotel located in an historic site that once housed a livery stable, a cotton warehouse and later a Coca-Cola bottling plant. The property was converted into a hotel in 1982. The Mulberry Inn is owned in a joint venture between KHP Fund II and KHP Fund III, and will undergo a major renovation in the latter half of 2013 to convert into a Kimpton hotel.

Kimpton also won the management contract for two upcoming new hotels in San Antonio and Milwaukee, marking the third Kimpton hotel in Texas and the latest in the brand’s history of adaptive-reuse projects, and the first Kimpton hotel in Milwaukee.