|On April 24, separate announcements came across the editorial desks at Lodging. The releases outlined a big deal that was taking place in the Lodging industry—the acquisition of Northbrook, Ill.-based Lane Hotels by AWH Partners LLC (AWH), a joint venture of August Group Ventures LLC (AGV) and Winston Harton Holdings LLC (WHH). The deal, which has an undisclosed price, also includes individual hotels owned by Lane Hospitality LLC.
Following the announcement, Lodging caught up with Russ Flicker, one of the principals of AWH. While many in the industry had long suspected that Lane Hotels might be primed for acquisition, Flicker confirmed that the deal has been a long time coming. “We’d been working with the Lane family for more than a year about their management business and their portfolio. They are strategically divesting of assets [reportedly to separate family’s assets or individual investment decisions by the younger generation of the Lane family],” Flicker said. “We loved the portfolio because we both have strong platforms, especially in the management company and they have some great real estate.”
Flicker said AWH has purchased the management company and over the next 12 to 24 months will acquire the assets of Lane.
Lane Hotels will still exist and be led by current president and CEO Bill DeForrest. “Bill and his team of managers and operators have done a great job with a national platform,” Flicker said.
(Russ Flicker and Bill DeForrest)
For AWH, which is a real estate investment company, the acquisition of Lane Hotels signals the first of many purchases from AWH Partners’ ongoing joint venture with an institutional equity source for the pursuit of hospitality investments. “We’re really excited. The opportunity with Lane is two parallel paths,” Flicker said. “On the one hand, Lane with its national reach will help us move quickly as we look to acquire assets both in terms of underwriting the assets and having teams that know a lot of the regions and markets. The second piece is that they’ll also see transaction opportunities through their relationships with past and present owners that we wouldn’t otherwise see.”
For Lane Hotels, the deal provides it with significant capital and a partner to continue to offer the high standard of operations and management its clients have valued over the last three decades and will grow its offerings through incorporating customer-centric tools, including social media, cutting-edge yield-management and proven operational sales and marketing expertise.
“Our partnership with AWH positions us incredibly well to grow our platform rapidly through expanding our service offerings and acquiring new management contracts, while continuing to provide world-class service to our existing clients,” DeForrest said in a statement. (DeForrest was scheduled to be in our interview but was unable to attend.)
“It gives Lane the tools to grow the portfolio faster as well,” Flicker said. “We are investing in Lane and really trying to get Bill and his team to grow the management nationally.”
Lane Hotels is the only management company AWH owns. The company does own hotels in multiple markets. The principals of AWH come from Blackstone Real Estate Advisors and the related companies so it has a strong institutional background.
Flicker said the Lane acquisition is only the beginning. “The opportunity here is to not only to buy the nine Lane owned hotels but also to go after other assets that makes sense, so we have a pretty big appetite,” he said.
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