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US: Private real estate investment firm KHP Capital Partners has closed on $300 million of commitments for its sixth discretionary real estate fund.
The new fund has made three investments to date. The first two deals include the ongoing adaptive reuse conversion of a historic office building in Charlotte, North Carolina into a 240-room lifestyle hotel, as well as the acquisition of the first mortgage note on a lifestyle hotel in Seattle, Washington.
The acquisition of the Hotel Viking in Newport, Rhode Island last week (April 17) marked the third investment.
KHP expects to invest in a total of eight to 10 projects through this fund, with the remainder to be deployed over the next two years. Supported by co-invest equity and leverage, it should translate into nearly $1 billion buying power.
“We are very pleased with the level of investor support for this new fund,” KHP partner Ben Rowe said. “In addition to strong support from our existing investors, we’ve expanded our LP base with several new highly respected institutional partners. With this new fund, we are ideally positioned to take advantage of what should be a particularly favourable investing environment over the next few years.”
Chief investment officer at KHP, Jeff Stulmaker added: “The final closing of our sixth fund comes at the perfect time to capitalise on the lingering distress from COVID and the elevated interest rate environment. With our value-add strategies that focus on driving operational upside, the renovation and repositioning of under-capitalised hotels and conversion of distressed historic office buildings to hotel use, we are well positioned to take advantage of the current environment to make compelling lifestyle hotel investments.”
Over the last 10 years, KHP has grown to $1 billion of equity under management. Through its funds, the firm collectively owns 16 hotels with an additional two investments in hotel credit.
Recent projects include the renovation of the Pan Pacific in Seattle, Washington which will be relaunched as the 1 Hotel Seattle in May 2025, and the transformation of the Le Meridien in San Francisco into the Jay Hotel, which is now part of Marriott’s Autograph Collection.
The firm was established in 2015 by Rowe, Mike Depatie and Joe Long as the continuation of the hotel real estate private equity business they started while leading Kimpton Hotels & Restaurants. Today, the company is led by Rowe, Long and Stulmaker.
Key takeaways:
• KHP Capital Partners raised $300 million for its sixth hotel-focused real estate fund.
• Initial investments include properties in Charlotte (North Carolina), Seattle (Washington), and Newport (Rhode Island), focusing on the lifestyle and boutique hotel segments.
• The firm is leveraging value-add strategies including adaptive reuse, repositioning, and distressed asset acquisition.
• KHP has grown to $1 billion in equity under management.
