TORONTO—Shifting from its usual focus on the “four core” real estate investments, Brookfield Asset Management has made its foray into the lodging sector with its just-announced acquisition of Thayer Lodging Group Inc. The hotel investment company will now operate as a subsidiary of locally based Brookfield, continuing to focus on investment management, asset management and property management businesses. The value of the transaction was not disclosed.
Thayer president Bruce Wiles will continue to run the operations and oversee employees. Leland C. Pillsbury and Fred V. Malek, Thayer’s co-founders and chairmen, will serve as co-chairmen & co-heads of Global Lodging of the new company and as senior advisors to Brookfield. In all, some 20 Thayer employees will be taken into Brookfield’s fold.
Pillsbury calls the deal “the capstone of a quarter-century of growth and a clear signal that the best days for investing in global hotel real estate are yet ahead.” In Brookfield, he adds, “we have found a partner that shares our optimistic view of the acquisition market for full-service hotels in major markets worldwide, and provides access to an ongoing source of capital.”
While Annapolis, MD-based Thayer now has Brookfield’s financial backing, the transaction gives Brookfield a hotel investment management business built on 25 years of success. Since forming its first private equity fund more than two decades ago, Thayer completed 43 hotel investments with a total acquisition cost of approximately $2.5 billion. Notably, Thayer formed a joint venture 10 years ago with Jin Jiang Group, China’s largest hotel and hospitality company, and in 2010 the duo acquired Interstate Hotels and Resorts. It was the largest third-party, independent hotel manager in the word, with some 27,000 employees, 400 hotels, annual sales of over $2.7 billion and $10 billion of assets under management in Europe, Asia and the US.
The deal combines two firms with similar investment objectives, management approaches and a common outlook on the global real estate market, relates Malek. “We’re pleased that Brookfield sees in Thayer a portal to attractive real estate investment opportunities, a proven value-added operating partner and a profitable operating platform.” As for Thayer, expect to see business as usual—“acquire hotel real estate below replacement cost, and aggressively increase NOI by increasing market share, managing channels of distribution and controlling costs.”
Brookfield and Thayer representatives did not respond to queries by press time. Watch GlobeSt.com for an update on this story.