Trinity Closes Oversubscribed Hospitality Fund
In any other example of the money pouring into the commercial real estate market, the fund was oversubscribed and raised a total of $520 million.
Trinity Fund Advisors announced the final close of Trinity GP Fund I LP, its inaugural US discretionary commingled real estate fund.
In any other example of the money pouring into the commercial real estate market, the fund was oversubscribed and raised a total of $520 million, significantly exceeding its $315 million target. Institutional investors, sovereign wealth funds, domestic and international family offices, and high-net-worth individuals are among the investors.
Trinity Fund Advisors, an affiliate of Trinity Real Estate Investments LLC, says the capital commitments make the fund one of the largest US hospitality focused real estate private equity funds targeting value-added investments in upscale and luxury resorts and hotels in the US. With the current dislocation in the hospitality market, Trinity believes there will be opportunities to acquire upscale and luxury assets at discounts to intrinsic value.
The fund will have more than $2.6 billion of capital to invest in debt, preferred equity and traditional equity positions. Trinity expects to generate significant co-investment opportunities for its partners over the next three years.
Trinity, which was founded in 1996, has made many notable hospitality trades, including the Westin Maui Resort & Spa, Grande Lakes Orlando Resort and the JW Marriott Phoenix Desert Ridge Resort & Spa.
“Closing our inaugural US discretionary commingled fund represents an important milestone for Trinity as it continues our evolution from a deal-by-deal investor to a global fund manager,” said Sean Hehir, managing partner, president, and CEO of Trinity, in a prepared statement.
Trinity isn’t alone in amassing capital for distressed lodging investments. Certares Management and Knighthead Capital Management have closed their first co-managed fund: the CK Opportunities Fund, which focuses on travel, tourism and hospitality companies facing acute liquidity and financing needs.
So far, distress has been slow to come to market, except hotels.
Eight percent of hotel sales involved a distressed asset between March of 2020 and February of 2021, according to Real Capital Analytics. There were very few hotel transactions in that timeframe, with only $10.6 billion traded, RCA says. By comparison, $36.6 billion traded in the prior 12-month period.
By comparison, only 1% of sales in industrial and apartments “was tied to an asset purchased out of distress,” according to RCA. The two sectors represented 60% of deal volume across the five core asset classes since the pandemic began.