Dive Brief:
- Global investment firm Certares has completed the final closing of its first-ever real estate hospitality fund with $284 million in equity commitments, the company announced this week.
- Certares launched its real estate platform, Certares Real Estate, in 2021. The platform aims to acquire hospitality real estate assets in growth markets and gateway cities across the U.S.
- Since the launch of Certares Real Estate, the firm has made investments in 10 hotels and is currently targeting an additional one or two deals to deploy the remainder of the fund’s capital. Certares Senior Managing Director and Head of Real Estate Nolan Hecht told Hotel Dive the fund will focus on growth markets that have a combination of leisure and corporate demand.
Dive Insight:
Certares Real Estate’s hotel acquisitions to date total over 2,100 keys, including at the Sea Crest Beach Hotel in Cape Cod, Massachusetts; the Courtyard San Diego Downtown; and the East Miami hotel.
Greg O'Hara, founder and senior managing director at Certares, called the firm’s real estate strategy “a natural extension” of its expertise in travel and hospitality.
“COVID-19 caused unprecedented disruption across the entire travel industry. As demand has returned robustly, hotels represent a category where investors who know the industry well can identify attractive assets,” O’Hara said in a statement.
Growth markets with both leisure and corporate demand — such as San Diego; Atlanta; Charleston, South Carolina; Salt Lake City; Phoenix; and Miami and Tampa in Florida — have been “a major theme of the travel recovery over the past few years,” Hecht told Hotel Dive.
“We also invested in a series of drive-to leisure hotels in markets like Cape Cod and Ocean City, Maryland, capitalizing on the initial snap back in U.S. travel,” Hecht said.
Certares Real Estate has invested approximately $228 million of fund capital since 2021 and noted a 1.4x multiple on invested capital as of March of this year. Certares has roughly $9.9 billion of assets under management, including co-investments, as of the same month, spanning travel, tourism, hospitality and travel-related businesses and consumer services.
