Dive Brief:
- Affiliates of Dallas-based private equity manager Paceline Equity Partners announced Monday that they acquired Home2 Suites by Hilton New York Long Island City, an extended stay hotel in Queens.
- Built in 2014, the 115-key, all-suites hotel is one of three Home2 Suites properties in New York City and is viewed as “an urban flagship-type asset by the brand,” according to Paceline’s announcement. Home2 Suites has the most hotels of any other brand in the middle-tier extended stay hotel segment underway or planned in the development pipeline.
- Changing traveler behavior has led to increased demand for extended stay options in urban areas, particularly Long Island City, making the hotel a desirable investment opportunity, Paceline detailed in its announcement. While extended stay investment and development is trending up nationwide, the trend has been most prevalent in suburban areas.
Dive Insight:
The ongoing development of several corporate headquarters, restaurants and retail spaces in Long Island City has driven increased leisure and corporate demand to the submarket, highlighting the area’s “strong recovery from the pandemic and diverse economic tailwinds,” Paceline CEO Sam Loughlin said in the release.
The Long Island City Home2 Suites, Loughlin said, has capitalized on this increased demand and is also well positioned to serve an increased number of extended stay travelers seeking cheaper room rates than can be found in nearby Manhattan.
As Paceline’s first hospitality investment in New York City, the acquisition exemplifies the company’s openness to opportunities across diverse market environments, Loughlin added. While the larger urban market is new territory for Paceline, the extended stay space is not — the firm acquired a TownePlace Suites by Marriott in North Carolina in 2021.
Smaller markets in the Southeast have proven to be desirable for extended stay investment. Noble Investment Group recently acquired a 10-property extended stay portfolio spanning Florida, Georgia, South Carolina, Tennessee and Kentucky, and Rimrock Companies signed a deal with extended stay brand My Place to develop 10 hotels across Tennessee, South Carolina and Georgia.
Larger urban markets like New York City, on the other hand, have seen less activity in the extended stay space, though demand is increasing.
“We continue to see strong interest in Home2 Suites across markets, including urban areas such as New York City,” Talene Staab, brand leader of Home2 Suites by Hilton, told Hotel Dive. “As the travel landscape continues to evolve, there has been a significant increase in demand for longer-term stays in markets of all types.”
Marriott’s TownePlace Suites similarly operates a handful of hotels in New York City. But Choice’s WoodSpring Suites and Extended Stay America don’t have hotels in NYC proper. Both brands operate hotels in nearby suburban areas, including several New Jersey cities.
