Kimpton Group Holding, LLC, the parent company of Kimpton Hotel & Restaurant Group, LLC, the largest and most successful player in the boutique/ lifestyle hotel segment, has announced it has closed its third institutional real estate fund and its follow up fund to Kimpton Hospitality Partners, L.P. (“KHP Fund”). With the close of this second KHP Fund (“KHP Fund II, LP”), Kimpton has raised $246 million – over 50 percent more than the amount raised in the first KHP Fund three years ago – with the goal of acquiring more than $800 million worth of hotels over the next three years.
The first KHP Fund, which closed in 2005, now has an ownership interest in 13 Kimpton properties. Kimpton’s first institutional fund, the $122 million Kimpton Development Opportunity Fund (“KDOF”), was raised in 1997 and acquired nine properties. All but two of those properties have now been sold. Similar to KDOF, the KHP Funds have been raised to acquire, develop and redevelop boutique/lifestyle hotel properties in select major U.S. metropolitan cities and resort areas across the country. Already acquired and under development in KHP II are the Architects Building in Philadelphia, being redeveloped as the Hotel Palomar Philadelphia, which began construction in February for a planned 2009 opening and a new-build Hotel Palomar in Chicago.
Kimpton is the only branded boutique hotel company with institutionally funded, fully discretionary, dedicated funds for the acquisition and development of boutique hotels. According to Kimpton CEO, Michael Depatie, “Our ability to raise money at this time of tightening credit within the real estate capital markets shows the increasing popularity of Kimpton style hotels and the strength of our business model.”
Similar to the first fund, KHP Fund II will utilize a multi-pronged strategy for investments:
o Acquire non-hotel buildings that can be converted to Kimpton hotel properties (i.e., “adaptive reuse” projects such as the Hotel Palomar Philadelphia, formerly the Architects Building, an historic office structure dating from 1929);
o Acquire existing hotels that either fit the Kimpton model, such as KHP’s acquisition of the Nine Zero Hotel in Boston or properties that are underutilized and where opportunities exist to reposition as a Kimpton hotel, such as the former Radisson Hotel in Washington, D.C. which was converted to a Hotel Palomar;
o Build new boutique hotels in targeted urban and resort areas in North America.
“We accomplished exactly what we set out to do with our first KHP Fund in acquiring assets that fit our investment strategy and within the investment period prescribed in our Fund. With our aggressive growth plans, a solid track record is a key asset in attracting investors and negotiating acquisitions,” said Joe Long, executive vice president of development and construction for Kimpton.
Kimpton has a 27-year history of acquiring, managing and converting underperforming hotels and buildings to profitable Kimpton-branded hotels. Kimpton and its affiliates formed 11 syndicated partnerships to invest in 13 Kimpton hotels between 1981 and 1995. Kimpton formed the Kimpton Development Opportunity Fund in 1997, with an affiliate of Crow Holdings serving as the lead investor, which invested in nine Kimpton hotels. Today, Kimpton is a fully integrated hotel company with its proprietary Kimpton brand, an experienced operations team, in-house development expertise and a national acquisitions team. In addition to its Fund acquisitions, Kimpton provides management services to owners of boutique hotels throughout North America, with two-thirds of its portfolio third party-owned.
ABOUT KIMPTON
San Francisco-based Kimpton Hotels & Restaurants is the first and leading collection of boutique hotels throughout the United States and Canada. Founded by Bill Kimpton in 1981, privately held Kimpton offers services and design elements focused on care, comfort, style, flavor and fun. Every Kimpton hotel reflects the energy, personality and pulse of its location, history and architectural style. Each property features personalized guest services, comforting in-room amenities, specialty rooms and suites, and provides a range of exciting culinary experiences through affiliated top-rated destination chef-driven restaurants. Kimpton takes pride in its commitment to social responsibility and leads the hospitality industry in ecological practices through its innovative EarthCare programs. In addition, Kimpton demonstrates a unique dedication to its female guests with the Women InTouch program, offering comfortable and safe environments, in-room fitness and wellness options as well as the company's unique "Forgot It, We've Got It" honor bar, providing essentials that women travelers may have forgotten at home. Among the company’s newest properties are the Hotel Palomar Arlington at Waterview, which opened in November 2007. Additional projects are underway in Los Angeles, New York, Florida, Philadelphia and Virginia. For more information, please visit www.KimptonHotels.com or call 1-800 -KIMPTON.
