Provenance Hotel Partners Creates $525M Real Estate Investment Fund

PORTLAND, OR—Provenance Hotel Partners, the real estate investment affiliate of Provenance Hotels – Portland-based operators of lifestyle hotels, has launched Provenance Hotel Partners Fund I (PHPF I), a $525-million real estate investment fund.

PHPF I’s first acquisition was the purchase from multiple individual partnerships of seven of the nine hotels currently managed or asset managed by Provenance Hotels. The assets purchased by the fund include the Hotel Max in Seattle; Hotel Murano in Tacoma, WA; the Westin Portland, Hotel deLuxe, Hotel Lucia and Sentinel in Portland; and Hotel Preston in Nashville, TN.

Provenance Hotel Partners will deploy the balance of PHPF I capital – and additional capital yet to be raised – toward the acquisition, development and redevelopment of value-add assets for a hold of 10 years, plus extensions.

The fund will target urban hotels with 100-300 keys in the top 25 primary and secondary markets in North America. These will include existing hotels, branded properties that can be de-flagged, adaptive-reuse projects and new-build development where appropriate. PHPF I will pursue full ownership, joint ventures, sliver equity and preferred equity deals that include the appropriate leverage. All properties purchased by PHPF I will be managed by Provenance Hotels.

Gordon Sondland, chairman & CEO, and Bashar Wali, president, helms Provenance Hotel Partners.

“Raising capital will be increasingly competitive as this economic cycle churns onward. Launching our first fund now prepares us to take advantage of the opportunities for investment that we anticipate will present themselves,” said Sondland. “Because our fund is discretionary, sellers and developers will be assured a quick and certain close – which should give us a distinct advantage in acquiring the right properties at an attractive price.”

“Since Provenance Hotels and our affiliates began investing in hotel projects in 1985, we have refined our approach to acquiring and improving the kind of value add assets that fit the investment goals of PHPF I,” added Wali. “We are looking forward to having the resources of PHPF I as they will allow us to apply our proven strategy even more nimbly, aggressively and effectively.”