Hotel-Focused Private Real Estate Fundraising

by Andrew Moylan

  • 02 Sep 2011
  • RE

There are currently 14 real estate funds on the road that are focusing primarily on investments in hotel properties, targeting an aggregate $4bn of capital from investors. Five such funds have a primary focus on North America and are targeting $1.5bn, with the same number of Europe-focused funds targeting $2bn (€1.5bn). Three of the funds are Asia and Rest of World-focused and are targeting commitments of $500mn.

Two solely hotel-focused funds reached a final close in 2010, raising a combined $1.1bn, which was down from the four hotel-focused funds that closed in 2009 raising the same amount of capital. The most successful year in terms of fundraising for hotel-focused funds was 2006, when 10 funds reached a final close, raising an aggregate $3.6bn.

Starwood Capital Group has raised two of the largest solely hotel-focused funds. It closed its Starwood Hospitality Fund I in 2006 with $900mn in commitments and Starwood Capital Global Hospitality Fund II in April 2010 on $965mn. Other notable funds include RLJ Development’s RLJ Lodging Fund II, which closed on $743mn in 2006 and HEI Hospitality Fund III, which closed in 2008 with commitments of $515mn.

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