Marriott and Hilton Premium Select-Service Hotels

Acquisition Program –  2024

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Industry

Real Estate/Hospitality

Company Type

Marriott and Hilton Select Service Hotels

Size

$45 Million

Investment Type

Equity

Overview

Pharos, a Marriott and Hilton-approved owner and operator of several select-service hotel brands, is seeking $45 million (alongside $5 million of sponsor capital) to acquire 5-7 carefully selected hotel properties using 50% leverage for $100 million of total purchasing power. 

Sponsor believes conditions are ripe to acquire this hotel portfolio in select markets at favorable pricing due to several factors, including maturing loans in a high-interest rate environment


Extensive expertise and track record acquiring and managing premium brand select service hotels


The hotels will be owned and operated using a streamlined owner-operator business model


Pharos has a clean and fully operational hotel management and investment platform

Opportunity

The premium branded select-service hotel market has several potential pressure points for hotel owners that could create immediate buying opportunities.

Maturing loans made during the pre-COVID-19 low-interest rate environment (typically 5-years for hotels) may force owners to make difficult decisions on whether to refinance at much higher rates or sell

The end of fund life for many private equity firms will require them to sell to close the fund, which will provide a more motivated selling market

Major brand-required renovations are due for many hotels, forcing owners to decide whether to spend more capital on the hotel or sell the hotel

Higher interest rates may eliminate many high-leverage buyers, creating better investing opportunities for lower-leverage or all-cash buyers

Property deferred maintenance, often delayed due to COVID-19, puts additional pressure on owners to invest more capital into their properties

Solution/Strategy

Marriott and Hilton select service hotels are mature and reliable brands in one of the best performing real estate asset classes

  • Marriott – Courtyard, Residence Inn, Springhill Suites, Aloft
  • Hilton – Homewood Suite, Hampton, Hilton Garden Inn

Marriott (170 million members) and Hilton (180 million members) have the two of the best brand-loyalty programs in the industry, which creates occupancy predictability


Millions of dollars are spent annually by Marriott and Hilton on individual brand national awareness

Management

Edward (Buddy) Watson, III | Chief Executive Officer


  • Over 40 years of experience within the hotel and travel industry, including extensive direct managing director experience in hotel ownership, development, operations, and financial experience
  • Has been directly involved in all aspects of the hotel industry as the managing partner of numerous single-asset hotel entities totaling $300 million
  • Has been a franchisee and operator with Marriott and Hilton and has completed 22 transactions
  • Has had public companies, family offices, private equity firms, municipalities, institutional investors, and public bondholders as investors
  • Attended Woodberry Forest School and the University of Miami

Ros Mallory | Chief Investment Officer


  • Over 25 years of experience in the hospitality industry, including 15 years with JLL Hotels and Hospitality Group helping lead the East Coast investment sales team
  • Successfully completed over 250 select-service investment sales transactions valued at over $1.5 billion, including single asset, portfolio, and hotel note sales
  • Extensive experience working with institutional owners including PE firms, public REITs, and CMBS special servicers and many close relationships with hotel owners/operators. BA, Wake Forest University
  • Licensed real estate broker in North Carolina and South Carolina

Stephanie Campbell, CPA | Chief Accounting Officer


  • CPA with over 20 years of experience as an accountant, including over 10 years with Pharos
  • Served as an auditor, trusted business advisor and chief financial officer at several leading financial service firms. Worked for Ernst & Young, KPMG and Green Walker. Secretary and Treasurer of Pharos Hospitality, LLC
  • Graduate of the University of South Carolina
Learn More About Pharos

Thank you for your interest in Pharos.

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CONTACT US

Hi. We're not around right now. But you can send us an email and we'll get back to you, asap.

Thanks, Ken

Ken Margolis | Managing Partner Castle Placement, LLC
1460 Broadway Street, Rte 400
New York, New York 10036
(212) 418-1188 | C: (516) 712-7784
kmargolis@castleplacement.com

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