Austin Marriott South TheAustin Marriott South is one of the hotels in the five-propertyportfolio purchased by JRK.

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AUSTIN, TX—Indicating that a group of hotels was a purchase itcould not pass up, JRK Property Holdings acquired a five-Marriottportfolio from an affiliate of RLJ Lodging Trust. The $65 millionall-cash purchase also marks the first multi-property hotel dealthe Los Angeles-based real estate investment firm has made in thehospitality arena, the debut acquisition originated by JRK'sinaugural $350 million hospitality fund.

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"We think there's a real opportunity in the hotel space rightnow and are excited to get our first deal closed in the new fund,"Danny Lippman, vice president of JRK Investors, the real estateinvestment arm of JRK Property Holdings, tells GlobeSt.com. "Overthe next year, we're looking to invest $1 billion to grow our hotelplatform."

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The Marriott Austin portfolio totals a combined 602 rooms acrossfive hotels located on one contiguous lot in South Austin. Thehotels are situated less than a 10-minute drive from both downtownand the Austin-Bergstrom International Airport along Interstate 35.The assets include a Marriott, Courtyard, Residence Inn, SpringHillSuites and Fairfield Inn & Suites.

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JRK will be investing more than $40,000 per key on strategiccapital improvements for the hotels, which originally openedbetween 1996 and 2001. Renovations will include complete room andcommon area upgrades as well as an enhanced food and beverageprogram across the portfolio.

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"Given the success we've had with syndicated hotel dealsthroughout the past decade, there was a growing interest from ourinvestors to start a dedicated platform for hospitality-specificventures," said Matt Lippman, executive vice president of JRKInvestors. "The ability to buy a primely located portfolio ofMarriott-branded assets in Austin with a significant value-addcomponent was one we could not pass up and is an example of thetype of high-yield opportunities we will continue to seek on behalfof our investors."

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Austin is one of the fastest growing areas in the nation,attracting a young population and has become a hub for high-techcompanies including Oracle, Facebook and IBM, which maintain asizable and growing employee base. The state capital also hostsinternationally known annual concerts and events, including Southby Southwest and the Austin City Limits music festival, drawing aconsistent flow of visitors throughout the year.

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JLL handled the transaction on behalf of the seller, while JRKwas self-represented.

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JRK is known for its $6 billion in multifamily holdings andseveral syndicated hotel transactions. Its $350 million hospitalityfund, the firm's seventh fund overall and first dedicated hotelfund, will focus on full- and select-service hotels for value-addand core plus investments in the nation's top 25 markets. The fundtargets transactions of more than $25 million and up to as large as$3 billion for portfolios, which would be made through its fullydiscretionary fund comprised of high-net worth individuals orthrough joint ventures with strategic partners.

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Lisa Brown

Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.