US: Host Hotels & Resorts has acquired a 49 per cent interest in Noble Investment Group for US$35 million.
Noble is a private equity group that focuses on extended stay hotel assets. It will collaborate with Host Hotels & Resorts on asset management, renovations and investments.
Host paid $35 million in cash and issued $56 million of operating partnership units. It is expecting to earn between $7 million and $10 million in annual fees.
Host is making a $150 million capital commitment as a limited partner in an existing Noble investment vehicle and will provide Noble with exclusive first-look at select-service and extended-stay hotel opportunities sourced through Host’s channels. Host is also making a minority investment in Noble’s fee-based asset management business, independent from the Noble team’s investment interests in their existing funds.
“As we continue to expand our institutional investment management platform, this strategic partnership further augments Noble’s ability to develop, source, and execute innovative growth strategies in travel, leisure, and hospitality,” said Mit Shah, Noble’s CEO.
“We are incredibly excited to invest with Noble, a leading private hospitality investment manager. In addition to operating through multiple cycles over three decades, we were particularly attracted to Noble’s proven expertise in sourcing and executing scalable select-service and extended-stay hotel investment opportunities,” said James F. Risoleo, Host president and CEO. “Host will benefit from both chain scale diversification and the ability to incubate and invest in future lodging-adjacent strategies.”
In December last year, Noble raised $360 million for its latest extended stay and select service fund.
