The venture will target limited-service, upscale extended-stay and small, full-service branded hotels in secondary and primary markets. The partnership will focus on acquisitions with turnaround or upside potential that can benefit from additional capital and aggressive asset management.

From a joint venture that acquired two hotels earlier this year, Winston intends to contribute the properties at their cost to the investment program. The two properties are a vacant building in suburban Cleveland that is being converted to a 113-room Courtyard by Marriott --slated to open during the first quarter of 2003--and the 102-room Fairfield Inn by Marriott in Des Moines, Iowa, which the joint venture converted from a previous franchise.

Of the total equity committed to each acquisition, Charlesbank will provide 85% with Winston providing the remaining 15%. Charlesbank will have the option to expand the venture after the initial equity is committed. The partners anticipate that they will be able to secure debt financing for 65% of the all-in cost of projects that the venture purchases.

Andy DiMatteo, Charlesbank senior vice president, notes that the company believes that "now is a good time to further diversify our real estate holdings through hotel properties, and we see numerous opportunities in this segment, which has performed well in the past few years." Winston's CEO Bob Winston adds that his company's goal is to "reinvigorate an underperforming hotel in a good location through capital infusion, rebranding, renovating, repositioning and often a management change." He predicts the venture "will be an important avenue for growth" for his company. Winston is a real estate investment trust specializing in the development, acquisition, rehabilitation and asset management of hotel properties.