KHP IV acquired the DoubleTree Hotel located directly on Scott Circle in a privately negotiated transaction. Acquired for well below replacement cost, the hotel featured excellent street frontage but was under-capitalized and in desperate need of a renovation. KHP IV invested $27 million to renovate the hotel, create a new restaurant outlet and add six additional keys. The full re-positioning of the property to a 4-star boutique hotel was completed in six months, and the newly re-imagined hotel opened just a year after acquisition. As part of the renovation, two new F&B outlets were added in partnership with local chefs. A former sales office was converted into a new all day café while the existing restaurant space was combined with a portion of the lobby to create a new full service restaurant that was awarded a Michelin-star in only its second year of operation.
KHP III originally acquired the independently operated Amara Resort & Spa in June 2013 and installed Kimpton Hotels & Restaurants to manage the property. The property is located in one of the most desirable locations in Sedona with commanding views of the red rocks. Property performance was dramatically improved following a minor upgrade to the guestrooms, lobby, restaurant and outdoor spaces in 2014. During KHP III’s hold period the property’s RevPAR penetration index increased 47 percentage points and NOI increased 7.8x.
KHP I originally acquired the independently operated Caleo Resort & Spa in December 2005 and installed Kimpton Hotels & Restaurants to manage the property. Following a comprehensive renovation and the introduction of newly re-concepted restaurant, KHP I introduced the newly re-branded FireSky Resort & Spa to the market. During KHP I’s hold period the property’s RevPAR penetration index was improved over 20 percentage points.
KHP II acquired the Lafayette Building in Philadelphia in October 2010, with the intent to redevelop the historic Class B office building into a four-star Hotel Monaco. KHP II was able to acquire the building, which had been vacant for over three years, well below other offers when those buyers backed out and the seller was faced with a pending foreclosure. KHP II took advantage of several financing and other incentives to reduce development costs and enhance the project’s investment returns. Despite opening on the heels of the Great Recession, the Hotel Monaco ramped up quickly and continually exceeded expectations, ranking in the top three on TripAdvisor among 89 Philadelphia hotels.
KHP II acquired the Canary Hotel, the only 4-star boutique hotel in downtown Santa Barbara, at an attractive going-in yield and a significant discount to replacement cost. Over the three years following KHP II’s acquisition, the property benefited from several cost saving and operational improvement initiatives that helped increase GOP margins by over 400 basis points. These improvements included a reconcepted restaurant and enhanced catering sales, which produced an incremental $1.3 million in food and beverage departmental profit.
KHP II acquired the historic Architects Building, a well located and under-utilized office building in the Rittenhouse Square neighborhood of Philadelphia, and undertook a $73 million redevelopment of the asset into a 4-star boutique hotel. Tax credits and other subsidies supported redevelopment at well below the cost of new construction, allowing for the creation of the first true boutique hotel in the strengthening Philadelphia market. Leveraging its distinct positioning, the property achieved a 99% RevPAR index against a competitive set that encompassed several of the leading hotels in the market, including the Ritz Carlton and Rittenhouse.
KHP I acquired the Radisson Hotel located off of Dupont Circle in an off-market transaction. The well located, under-branded and under-performing hotel was acquired well below replacement cost, with an opportunity to realize significant upside through a conversion and repositioning of the asset into a premier, 4-star boutique property. KHP I invested $40 million to modernize the building and add 34 additional keys. Following the repositioning, the Palomar significantly outperformed its competitive set, achieving a RevPAR penetration of 116%. NOI increased nearly 300% during KHP I’s ownership.
KHP II acquired this high-quality asset in an irreplaceable location on the Willamette River at an attractive going-in yield. The property was previously managed by a smaller regional operator, providing an opportunity to improve topline performance through better branding, distribution, and revenue strategy, further supported by $2.6 million in strategic upgrades to FF&E. RevPAR penetration improved 8.4 percentage points during KHP II’s ownership, helping to produce an NOI increase in excess of 100%.