Dive Brief:
- Los Angeles-based investment firm Ares Management partnered with Arlington, Virginia-based private equity firm Excel Group to invest in a portfolio of eight limited-service, select-service and extended stay hotels owned by Excel, the firms announced Tuesday.
- The hotels fall under Marriott International and Hilton brands and are primarily situated in “high demand” markets along the East Coast, according to the announcement. The amount of the investment was not disclosed.
- Select-service and extended stay hotels are set to see continued growth and increased investment activity in 2025 as guest demand for the sector rises, according to JLL.
Dive Insight:
A spokesperson for Excel Group declined to name the locations of the eight properties, but said that Excel and Ares “plan to deploy the growth capital towards limited service and extended stay Hilton and Marriott hotels across the U.S.”
Shoham Amin, founder and principal of Excel Group, called the transaction “a pivotal milestone for Excel” in a statement.
“We are excited to have Ares’s strategic support as we expand our portfolio and seek to achieve even greater success in the future,” Amin added.
Since its founding in 2011, Excel has acquired approximately $1 billion in hotel real estate.
Ares Co-Head of Real Estate Secondaries Jamie Sunday said the firm is looking forward to “strategically add hotels to the existing portfolio.” As of year-end 2024, Ares had over $525 billion of assets under management.
In 2024, demand for hotels in the extended stay and select-service sector “surged” by 232,000 room nights year over year, according to a JLL report released last month. This year, JLL expects guest demand for the sector to surpass 2019 levels.
Despite these strong demand fundamentals, demand bifurcation continues to impact leisure travel demand for extended stay hotels at lower chain scales, Extended Stay CEO Greg Juceam told Hotel Dive earlier this month. Juceam said business travel and temporary housing needs are driving much of the sector’s demand growth.
Hospitality professionals expect hotel investment to ramp up amid a cooling interest rate environment this year. Global Head of JLL Hotels Research Zach Demuth told Hotel Dive in January that “urban markets will drive investment demand [this] year.”
