Värde and Hawkins Way Form $1 Billion Joint Venture to Acquire Value-Add and Distressed Hospitality and Housing Assets

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January 11, 2022
  • JV seeded with four residential development investments in New York and California, and has acquired the DoubleTree by Hilton Metropolitan in Manhattan
  • Additional $500 million equity commitment to acquire and operate hospitality and housing / residential assets in major U.S. cities

NEW YORK – Värde Partners, a leading global alternative investment firm, and Hawkins Way Capital, a vertically integrated real estate company, today announced they have formed a joint venture to acquire more than $1 billion of value-add and distressed hospitality and housing assets in major U.S. cities. The assets will operate under a Hawkins Way affiliate.

The JV, through an affiliate, recently purchased 569 Lexington Avenue in the heart of Midtown Manhattan, New York from RLJ Lodging Trust. Currently a non-operating 764-key hotel, the 19-story, 349,280 square foot building was previously a DoubleTree-branded hotel focused on corporate and business travel.

“There is a limited supply of affordable lifestyle hospitality and residential products in the center of U.S. gateway cities, against a market of unfulfilled and growing consumer demand. With a structural dislocation in values of select assets in these markets, we believe there is a significant opportunity to acquire properties at attractive prices,” said Francisco Milone, Partner at Värde Partners. “We welcome the opportunity to continue our partnership with Hawkins Way and combine our expertise in sourcing, repositioning and managing real estate assets to unlock this opportunity.”

The JV will also be seeded with operating properties in San Francisco, Oakland, and two in Brooklyn.

Ross Walker, Managing Partner at Hawkins Way Capital, added: “The pandemic has had a profound impact on certain hotel and overlooked housing assets, leaving many in financial difficulty and ultimately unviable in their current form. This has led to a window of opportunity to acquire properties at a discount to intrinsic and potential value, with a view to repositioning the assets for higher, better uses. The partnership with Värde will help support the growth of our platform as we seek to capitalize on what we believe is a large and scalable investment opportunity.”

Lazard acted as exclusive financial advisor to Hawkins Way and the partnership in this transaction.

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 $85 billion since inception and manages $14 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 has offices in Minneapolis, New York, London, Singapore and other cities in Asia and Europe. For more information, please visit www.varde.com.

About Hawkins Way Capital

Hawkins Way Capital, co-founded by Managing Partners Ross Walker and Karan Suri, is a vertically integrated real estate company with over $1 billion of assets under management on behalf of institutions and individuals focused on value-add and opportunistic investments across various asset classes and geographies. The company seeks niche theses targeting attractive risk-adjusted returns. Its disciplined approach leverages the principals’ investing experience and extensive network to execute strategies that offer long-term value. Hawkins Way has offices in Los Angeles and New York. For more information, please visit www.hawkinsway.com.