Blue Flag Acquires The Kelley House; Life House to Manage

MARTHAS VINEYARD, MA—Real estate private equity firm Blue Flag Capital, part of Blue Flag Partners, has acquired The Kelley House, partnering with Life House through its Life Hospitality independent management platform on the operation of the 57-room boutique hotel.

This transaction represents the fourth collaboration between NYC-based Life House and Boston-based Blue Flag. Their partnership includes multiple additional assets under contract in key target markets, and active discussions underway to acquire hotels in Nantucket, Martha’s Vineyard and Long Island.

The Kelley House opened its doors in 1742 when Martha’s Vineyard was world-renowned as a colonial settlement for whalers. During those thriving days of whaling glory, the Port of Edgartown was one of the most important ports nearby the New England coast. Whalers maintained their own custom houses—including the likes of the Kelley House—and racked up thousands of dollars’ worth of business annually (millions in today’s dollars) from ships that arrived from every corner of the world to the picturesque harbor. Fast forward more than 275 years and the Kelley House hotel remains renowned as one of the five oldest hotels in the U.S., with nearly three centuries of history unfolding within its walls. It stands amongst the most historically and culturally significant properties on the island, commanding an unmatched presence across six buildings in the heart of Edgartown, MA.

“As New England locals with deep personal ties to Martha’s Vineyard, we are honored for the opportunity to steward such a prominent and historic property as the Kelley House, located in the heart of downtown Edgartown,” said Jason Brown, a partner at Blue Flag. “We’re actively seeking to further our relationship with Life House, who with their advanced tech-enabled approach has enabled us to thrive in our existing portfolio by delivering a great high-end guest experience while materially minimizing operational leverage in these uncertain times.”

The hotel joins a growing family of locally-inspired independent boutique hotels owned by Blue Flag and operated by Life House, which include the 58-key Roberts House Collection and 17-key Life House, Nantucket in Nantucket, MA, just a short boat ride away from Martha’s Vineyard.

“We look forward to respecting the heritage of the hotel, with a business plan that entails preserving the historic branding of Kelley House and Newes from America, which we know firsthand to be a favorite of both year-round locals and visitors to Edgartown alike,” said Brad Guidi, co-founder/partner, Blue Flag.

Life House will leverage its independent management platform, Life Hospitality, to enhance guest safety in a post-Covid-19 environment leveraging tech-enabled means, such as implementing check-in kiosks and mobile app check in—prior to Blue Flag reinvesting into further elevating the physical asset, overall design and guest experience during the 2021 offseason.

“We’re thrilled to continue working with Blue Flag and The Kelley House is another opportunity for us to bring another historic hotel to its full potential through our vertically integrated platform,” said Rami Zeidan, founder/CEO, Life House. “There are many beautiful hotels with so much potential throughout the Northeast without operational sophistication and branding to match their financial and experiential potential and we’re excited to continue working our way throughout the region alongside Blue Flag.”