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NORWALK, CT-HEI Hospitality, LLC reports it plans to spend between $500 million and $1 billion to expand its hotel portfolio this year via acquisitions and new development projects. The locally based firm is also combining its hotel ownership division with its wholly owned management subsidiary Merritt Hospitality under a new name: HEI Hotels and Resorts. Heading up HEI’s management operations is Ted Darnall, the former president of Starwood Real Estate Group.

“We have acquired more than $2 billion in hotel-related real estate in the past four years,” says Gary Mendell, HEI chairman and CEO. “We remain committed to investing approximately $500 million to $1 billion a year for the foreseeable future.”

Steve Mendell, HEI executive vice president of acquisitions and development, notes the firm is expanding its acquisition and development target criteria. Up until now the firm normally sought out upscale, first-class, full-service hotels that range in size from 200 rooms to 500 rooms in the top 50 MSAs in the country.

“We are expanding our development focus beyond select service to include full-service properties and mixed-use, such as the W hotel and residences in Hollywood that we currently have under development in a joint venture,” he notes.

HEI’s acquisition targets continue to include hotels with the Marriott, Hilton, Starwood, InterContinental and Hyatt flags. The firm also plans to add resorts and independent hotels to its portfolio.

On Friday, HEI Hospitality and Starwood Hotels & Resorts Worldwide Inc. of White Plains announced the conversion of the Marriott Austin Capitol in Austin, TX to the Sheraton Austin Hotel. HEI closed on the purchase of the 361-room hotel the same day. No purchase price was revealed. The hotel is owned and operated under a long-term management agreement with Starwood.

A company spokesman says that HEI currently has two acquisitions in contract, a hotel located in the Northeast and an Embassy Suites Hotel in Orlando. The Orlando transaction is expected to close on Feb. 15, while the deal for the hotel in the Northeast could be finalized in the next 45 days.

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