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NEW YORK CITY-GoldenTree InSite Partners, Aimbridge Hospitality and JF Capital Advisors have formed a partnership to acquire, renovate and manage two Doubletree hotels located in the Denver and Dallas areas. Financial details of the transaction were not disclosed to GlobeSt.com.

The properties are a 300-room Doubletree Hotel Dallas-Campbell Centre in Dallas and a 248-room Doubletree Hotel Denver-Southeast in Aurora, CO. Under the agreement, Aimbridge Hospitality will operate and manage the hotels on behalf of the partnership, under a franchise agreement with Doubletree Hotel Systems, Inc., a wholly owned subsidiary of Hilton Hotels Corp.

“Our perspective is we look for underperforming assets,” Jack McHugh, senior vice president of business development at Aimbridge Hospitality tells GlobeSt.com. “We look to see what it needs–rebranding, renovation, repositioning. We ask ourselves, ‘can we bring value to our capital partners when we look at a deal like this.” McHugh adds that Aimbridge currently manages 30 hotel properties, mostly full-service, and the company will probably stay within the 50 to 60 property owning range. “Our upper management likes to be on first-name basis with the property managers, so I wouldn’t see us getting beyond the 50 to 60 range.”

According to Josh Pristaw, a managing director at GoldenTree InSite Partners, supposedly the biggest financial player in the deal, the partnership plans to sink $9 million into the hotels and “will include upgrading the guest rooms, public areas and amenities at each hotel.”

Commenting on the needs of the two hotels, Jonathan Falik, CEO of JF Capital Advisors, tells GlobeSt.com, “the hotels need a little TLC. What Aimbridge is doing is taking good quality hotels and refreshing them. That’s what they have done in their three-plus years of existence. They aren’t looking at properties that need major capital investment–some new wallpaper, etc.”

Outside observer to the deal Nolan’s Hecht, director, Hospitality Transactions Group at Cushman & Wakefield, says the hotel acquisition market is as hot as it has been in the last 10 years for capital investment. He attributes much of this to the rising cost of new constructions and the quicker returns on investment.

“There is very little new hotel development,” Hecht tells GlobeSt.com. “You have construction costs up 10%, and across the board, material, labor, it’s all up. It makes more sense to acquire existing properties. The yield is very attractive to the investors so it’s been attracting the capital.”

Hecht adds that 2007, according to his knowledge base, is promising to be just as hot as 2006 and “double digit returns” should be the norm not that exception. “Big properties, medium properties, small properties, everything in the hotel market is selling. That’s why you have the management companies aligning with the capital.”

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