KHP Capital Partners Secures $300 Million for Lifestyle Hotel Investments

KHP Capital Partners (KHP), a private real estate investment firm, has recently announced the closing of its sixth discretionary real estate fund, with commitments totaling an impressive $300 million. This capital infusion is set to propel KHP's mission of acquiring and renovating lifestyle hotels across the United States. Founded in 2015 by industry veterans Mike Depatie, Joe Long, and Ben Rowe, KHP has been making strides in the hotel investment sector by applying a value-add strategy that focuses on enhancing branding, management, and overall guest experience.

Throughout its operational history, KHP has successfully renovated various properties, including the noteworthy transformation of the Pan Pacific in Seattle, which will soon be relaunched as the 1 Hotel Seattle, and the recent redevelopment of Le Meridien in San Francisco into the trendy Jay Hotel. These successful projects demonstrate KHP's commitment to not only acquire but also elevate hotel properties to new heights.

Ben Rowe, one of the Managing Partners, expressed enthusiasm about the newly secured fund, stating, "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." This strategic move positions KHP optimally to capitalize on potential investment opportunities in the hospitality sector, especially in the wake of the COVID-19 pandemic, which has left many hotels undercapitalized and ripe for revitalization.

KHP Fund VI is expected to focus on acquiring hotels that can benefit from operational enhancement. Key strategies involve the renovation of properties requiring investment as well as repurposing historic buildings into stylish hotels. By honing in on these opportunities, KHP aims to stabilize and improve returns for both investors and guests.

The newly established fund has already made significant moves, with three investments completed to date. These include transforming a historic office building in Charlotte, NC into a 240-room lifestyle hotel and purchasing the first mortgage note of a lifestyle hotel in Seattle, WA. Additionally, KHP recently secured the acquisition of the Hotel Viking in Newport, RI. KHP plans to continue deploying the remaining capital from this fund over the next two years, aiming to unleash nearly $1 billion in buying power through co-invest equity and leverage strategies.

Jeff Stulmaker, Partner and Chief Investment Officer, acknowledged the favorable investing environment, remarking, "The final closing of our sixth fund comes at the perfect time to capitalize on the lingering distress from COVID and the elevated interest rate environment. With our value-add strategies, we are well positioned to take advantage of the current scenario to make compelling lifestyle hotel investments."

With an impressive portfolio that now totals approximately $1 billion in equity under management, KHP owns sixteen hotels and has additional investments in the hotel credit space. As they venture into their next chapter with KHP Fund VI, the firm is poised to lead innovative changes in the hospitality sector through both renovations and the reimagining of existing structures.

For anyone looking to keep track of significant developments in lifestyle hotels, KHP Capital Partners will undoubtedly continue to be a key player in shaping the future of this industry. To learn more about their strategies and initiatives, you can visit their official website at www.khpcapitalpartners.com.