• Stratedy at KHP Capital Partners

    Investment Focus

    Lifestyle & Independent Hotels

    We believe that the lifestyle and independent hotel segments offer some of the best investment opportunities in hotel real estate due to a combination of growing consumer demand and opportunities for outsized performance improvement due to inconsistent execution by inexperienced owners and operators in this niche.

    Primary Urban Markets & Select Leisure Destinations

    We focus on primary urban markets and select leisure destinations with diversified and growing demand characteristics and high barriers to entry. We also selectively pursue opportunities in secondary markets with high average daily rates where the lifestyle hotel product we create stands out among the competition.

    Controlling Equity Position

    We pursue control oriented equity investments that generally take the form of whole ownership or joint venture structures. Our targeted equity commitment is typically between $10 and $50 million, but we will selectively invest in assets requiring both smaller and larger commitments.
    Strategy at KHP Capital Partners

    Investment Strategies

    Operations Enhancement

    Existing hotels in good physical condition that will benefit from our rigorous approach to asset management and a change in management and/or brand.

    Renovation / Repositioning

    Existing hotels in desirable locations and in need of renovation and/or market repositioning. These properties are well located, but are failing to perform to their full potential due to a combination of their physical state and management and/or brand affiliation.

    Adaptive Reuse

    Buildings (office, government, warehouse, medical, etc.) that are well located and suitable for conversion to hotels. These properties can often be acquired with limited competition, well below replacement cost, and are frequently eligible for public incentives.

    Preferred Equity / Debt

    Select preferred equity, mezzanine debt, or note purchases for high-quality assets that fall within our typical acquisition targets and where our deep operational expertise makes us a preferred capital source.

    New Development

    Select ground-up development projects where supply and demand fundamentals support new construction and land can be purchased at a favorable price with entitlements already in place.

    Investment Principles


    We understand that lodging is a cyclical business, which is directly affected by the interplay of supply and demand, and is highly correlated with overall economic growth. We therefore focus on more complex value-add investments that are less dependent on underlying market growth.

    Well Located

    We focus on well located properties in high barrier to entry markets to further insulate against cyclical risk.

    Discount to Replacement Cost

    We acquire and re-develop at a discount to replacement cost in an effort to ensure that our all-in cost basis provides a solid foundation for value-creation. We will also seek to redevelop at a discount to replacement cost, buying underutilized buildings at a fraction of their cost and utilizing historic tax credits and other incentives to offset redevelopment costs.

    Asymmetrical Risk

    We focus on opportunities with more upside than downside, with an underlying goal of capital preservation. We use scenario modeling to predict a range of potential outcomes and identify deals with positive long term capital growth prospects.

    Limited Competition

    We seek deals with limited competition and we source many of our acquisitions directly. To the extent we compete in broadly brokered auctions, we pursue deals where our competitive advantages have the potential to create more value than those with whom we are competing.

    Moderate Leverage

    We maintain a moderate leverage strategy and do not employ excessive debt (which creates excessive risk) to reach targeted returns. We target unlevered return hurdles consistent with risk and then derive targeted equity return hurdles based on leverage levels.

    A Hospitality Investment Firm