Distressed asset presents potential upside in one of country's strongest hotel markets.
PLYMOUTH MEETING, PA. – CenterSquare Investment Management, an investment boutique of BNY Mellon, announced the acquisition of an Anaheim-area hotel property in a joint venture by the CenterSquare Value-Added Fund III. CenterSquare has partnered with Foster Enterprises and leading hotel management firm Interstate Hotels Group to acquire the property.
“This investment presented a unique opportunity to acquire a relatively new hotel property possessing many fundamental attributes that appeal to the demand drivers specific to this market, yet was underperforming as a result of being operated as an independent hotel lacking institutional ownership,” said Jeff Reder, Senior Vice President, Private Real Estate for CenterSquare. “The investment was sourced off market and acquired at a compelling basis. We will seek to execute our business plan and stabilize operations, with the goal of generating an attractive return and enhancing long-term value as Disneyland continues to make significant investment in their park, most notably with the planned addition of Star Wars Land.”
CenterSquare and its partners will implement an extensive property improvement plan for the hotel, which includes a complete overhaul of all guest rooms and common areas, and the addition of a new pool area. Upon completion of the renovations, the hotel will re-open as a Candlewood Suites, one of the Intercontinental Hotel Group brands. By seeking to provide a high quality product, institutional ownership and management, affiliation with a major hotel brand and proximity to Disneyland, the asset should be positioned to perform favorably in this high demand hotel market.
“This acquisition is an excellent illustration of CenterSquare’s investment strategy to drive return by focusing on middle-market transitional assets that offer the potential to achieve greater yields through the execution of traditional value-add strategies,” said Todd Briddell, CenterSquare’s CEO and Chief Investment Officer. “We believe that the Anaheim property, just blocks away from Disneyland, is very well located real estate with a value-add component in one of the strongest hotel markets in the country. It is the latest addition to CenterSquare’s portfolio that leverages deep industry knowledge and relationships to seek to generate attractive potential returns.”
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