Flynn Properties and Värde Partners Form Joint Venture, Acquire 20 Select Service HotelsAugust 9, 2021
$211 million deal Includes 11 Marriott®- and Nine Hilton®-Branded Hotels
SAN FRANCISCO and MINNEAPOLIS – Flynn Properties Inc. (“Flynn”), owner of commercial real estate, luxury resorts and select service hotel properties in America and abroad, in a joint venture with Värde Partners, a leading global alternative investment firm, today announced that it has acquired 20 select service hotels – 11 Marriott®- and nine Hilton®-branded locations – in a $211 million deal with Apple Hospitality REIT (NYSE: APLE), a publicly traded real estate investment trust (REIT) that owns one of the largest and most diverse portfolios of upscale, rooms-focused hotels in the United States.
The newly acquired properties, located throughout the Sunbelt, Northeast, Pacific Northwest and Midwest, will undergo capital improvements over time. Flynn Properties will serve as the managing member of the joint venture, charged with day-to-day asset management of the portfolio and execution of the business plan.
“We are excited to announce the addition of these Marriott- and Hilton-branded hotels to our portfolio of properties,” said Greg Flynn, Founder, Chairman and Chief Executive Officer of Flynn Properties. “This acquisition is part of a broader business strategy by Flynn Properties to increase its select service hotel footprint, which proved to be one of the best performing sectors in the industry. We are also excited by the caliber of properties included in this deal, as both Marriott and Hilton are global hospitality icons known for hosting some of the world’s most loyal travelers for business and leisure while offering exceedingly robust guest loyalty programs, which we believe will be a key source of guest revenue and retention.”
“Värde is pleased to partner with an experienced sponsor in Flynn Properties to acquire a portfolio of well-positioned hospitality properties in attractive locations with compelling market supply/demand dynamics. These properties have fared well through the pandemic, demonstrating the healthy demand for select service hotels and the strength of their brands,” said Francisco Milone, Head of Real Estate Special Situations at Värde Partners. “The hotel sector has experienced an unprecedented shock, with extreme levels of cash-flow disruption driving a significant demand for capital. As the sector begins to recover from the pandemic, we believe there will be opportunities to invest selectively in high quality assets that are well positioned to capitalize on the return of business and leisure travel.”
This acquisition will bring Flynn Properties’ select service hotel portfolio to 26 properties, complementing the six existing Marriott-branded hotels it currently owns. Flynn Properties is a division of San Francisco-based Flynn Holdings, which has two principal businesses: real estate and restaurants. Flynn Properties’ prior hotel investments include six Marriott Courtyards as well as four super-luxury resorts: Esperanza in Los Cabos, Mexico, the Carneros Resort & Spa and Solage, both located in Napa, California, and the Hotel Madeline in Telluride, Colorado. Its commercial investments consist primarily of tech-oriented office buildings on the West Coast totaling over 3 million square feet. Its affiliate, Flynn Restaurant Group LP, is the largest franchise restaurant operator in the world and one of the 20 largest foodservice companies of any kind in the United States, owning and operating 2,400 restaurants in 44 states generating $3.6 billion in sales and employing approximately 73,000 people.
Värde has over 25 years of experience investing in real estate, including financing and owning hospitality properties. The firm recently completed the sale of a portfolio of eight European luxury hotels operating under The Dedica Anthology brand in September 2020 after transforming the hotel group by appointing a best-in-class management team, refinancing the business, and executing an ambitious investment program.
About Flynn Properties, Inc.
Flynn Properties Inc. has substantial experience in commercial and hospitality real estate investment. Founded in 1994 and based in San Francisco, CA, Flynn Properties has owned in excess of 3 million square feet of tech-oriented office buildings on the West Coast. In addition to 26 Marriott- and Hilton-branded select service hotels, Flynn Properties’ hospitality investments also include the luxury resorts Esperanza, located in Los Cabos, Mexico, the Carneros Resort and Solage, both located in the Napa Valley, and the Hotel Madeline in Telluride. For more information, visit www.flynnholdings.com.
About Värde Partners
Värde Partners is a leading global alternative investment firm with roots in credit and distressed. Founded in 1993, the firm has invested $80 billion since inception and manages $15 billion on behalf of a global investor base. The firm’s investments span corporate and traded credit, real estate and mortgages, private equity and direct lending. Värde employs more than 300 professionals worldwide with offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, visit www.varde.com.