HOTEL INVESTMENT AND management company Banyan Group, an Investment company announced the initial closing of $20 million Banyan Lodging Enhanced Value Fund, also known as BLEV or “Believe.”
The fund gives investors an opportunity to purchase hotels that have been impacted by the COVID-19 pandemic, a statement said. The group said that the first Closing delivered more than half of capital sought to acquire pandemic-impacted hotels.
According to prospective investors, BLEV will reach its $35 million hard cap early next year, well before the formal end of its offering period.
“The hospitality industry continues to reel from the COVID pandemic and its uneven recovery, and many markets continue to suffer from a sustained, record decline in hotel performance, a lack of liquidity in the capital markets and value dislocation,” said Andy Chopra, managing partner and CIO at Banyan Investment Group. “We believe the impact caused by the pandemic has created a number of investment opportunities, ranging from newer assets selling at below replacement costs to discounts resulting from owners facing liquidity crises. BLEV will take advantage of these prevailing headwinds as we move further into a post-pandemic world.”
The fund will be used to form joint venture partnerships with institutional investors and/or syndicates of retail investors, with a total investible equity in the range of $350,000,000. The BLEV will focus on high-barrier-to-entry hotel locations, targeting properties with significant discounts and expects to deliver superior, risk-adjusted returns for investors when the hospitality industry re-stabilizes.
Banyan is led by Rakesh Chauhan, managing partner and CEO, left, and Andy Chopra, managing partner and CIO.
It targets both individual property and portfolio acquisitions mainly in primary and secondary markets with multiple business and leisure demand generators. It looks at branded and independent hotels with 100-350 rooms, the statement further said.
“Having weathered multiple hospitality cycles, we have firsthand knowledge and experience of acquiring, owning and operating hotels through all phases of downturn and recovery,” said Rakesh Chauhan, Banyan’s managing partner and CEO. “The velocity of this first raise was much stronger than we initially expected and has put us ahead of our own scheduling. We are confident that the time to capitalize is upon us, and we are looking for savvy investors to help take advantage of the situation.”
With offices in Florida and Georgia, Banyan acquires and manages select-service hotels in the U.S.
The impact of COVID still continues in the industry as the recent surge in Omicron cases has led to some travel restrictions in the country.
Sonesta launched Americas Best Value Studios, an extended-stay version of ABVI.
The model targets owners seeking limited front desk and housekeeping.
The brand meets demand for longer-term, value-focused stays.
SONESTA INTERNATIONAL HOTELS Corp. launched Americas Best Value Studios by Sonesta, an extended-stay version of its franchised brand, Americas Best Value Inn. The model targets owners seeking limited front desk and housekeeping, optional fitness center and lobby market along with standard brand requirements.
The brand aims to address the growing demand for longer-term, value-driven accommodations, Sonesta said in a statement.
"Americas Best Value Studios by Sonesta represents a strategic evolution of our trusted Americas Best Value Inn brand," Keith Pierce, Sonesta’s executive vice president and president of franchise development, said. "We are expanding our offerings to directly address the increasing demand within the extended-stay segment, providing a practical solution for travelers seeking longer-term lodging at value. This new brand type allows our local franchised owner-operators to tap into a growing market while maintaining the community-focused experience that Americas Best Value Inn is known for."
ABVI has a majority presence in secondary and tertiary markets, the statement said.
The extended-stay brand’s operational model features a front desk, bi-weekly housekeeping, on-site laundry and pet-friendly accommodations, Sonesta said. Guests can also earn or redeem points through the Sonesta Travel Pass loyalty program.
In August, Sonesta named Stayntouch its preferred property management system after a two-year review of its ability to support the company’s franchise model. The company operates more than 1,100 properties with more than 100,000 rooms across 13 brands on three continents.
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