Private real estate investment company KHP Capital Partners has secured $300m in commitments for its sixth real estate fund.
The KHP Fund VI will maintain the company’s strategy of adding value through the purchase and refurbishment of assets, aiming to establish them as top-tier lifestyle accommodations.
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The company has previously executed projects such as the renovation of the Pan Pacific in Seattle, which is set to relaunch as the 1 Hotel Seattle next month.
Another notable transformation is of Le Meridien in San Francisco, now the Jay Hotel, part of Marriott’s Autograph Collection.
Established in 2015 by industry veterans Mike Depatie, Joe Long, and Ben Rowe, KHP originated from the hotel real estate private equity business initiated at Kimpton Hotels & Restaurants.
Before Kimpton’s acquisition by InterContinental Hotel Group in January 2015, the team also managed the hotel and restaurant operations.
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By GlobalDataOver the past decade, KHP has expanded by accumulating $1bn of equity under management.
The KHP funds collectively own 16 hotels and have made two additional investments in hotel credit.
The company is currently under the leadership of managing partners Ben Rowe and Joe Long, with Jeff Stulmaker serving as partner and chief investment officer.
Rowe said: “We are very pleased with the level of investor support for this new fund. In addition to strong support from our existing investors, we’ve expanded our LP base with several new highly respected institutional partners. With this new fund, we are ideally positioned to take advantage of what should be a particularly favourable investing environment over the next few years.”
The new fund has already made three investments, including the conversion of a historic office building in Charlotte into a lifestyle hotel and the acquisition of a mortgage note on a Seattle hotel.
The fund’s third investment was the acquisition of the Hotel Viking in Newport, completed on 17 April.
KHP anticipates deploying the remainder of the fund within the next two years.
With co-invest equity and leverage, the fund’s buying power could reach nearly $1bn.
The company expects to invest in eight to ten projects, focusing on major US markets and select leisure destinations.
Stulmaker added: “The final closing of our sixth fund comes at the perfect time to capitalise on the lingering distress from Covid and the elevated interest rate environment.
“With our value-add strategies that focus on driving operational upside, the renovation and repositioning of under-capitalised hotels and conversion of distressed historic office buildings to hotel use, we are well-positioned to take advantage of the current environment to make compelling lifestyle hotel investments.”
