Under the joint venture, of which Noble owns 60 percent and Hyatt’s affiliate 40 percent, Noble will invest up to $48 million in new Hyatt-branded select service development projects. Additionally, as part of the agreements, a Hyatt affiliate sold six Hyatt Place and two Hyatt Summerfield Suites hotels to the joint venture for $110 million. The joint venture will invest $5 million to renovate the eight properties, which its affiliates will manage under franchise agreements with Hyatt. Noble now manages twenty-one full and select service Hyatt-branded hotels.
“This transaction illustrates our willingness to use capital invested in existing hotels to expand our market presence. Strengthening our representation in the select service segment is a top priority for Hyatt as it helps to enhance our ability to serve our corporate customers. Moving forward, we will continue to apply our resources – management expertise, creativity and capital – in ways that advance that goal and contribute to the success of the venture,” said Mark Hoplamazian, president and CEO for Hyatt.
“Noble is one of the lodging industry’s most respected owners and developers and we are delighted to expand our relationship with them to continue the momentum in the growth of Hyatt’s select service brands in North America,” said Steve Haggerty, global head of real estate and development for Hyatt. “The structure of this joint venture will enable us to increase our select service presence in markets where our customers are traveling, even in an environment in which construction financing for new hotel projects remains scarce.”
The joint venture is actively pursuing a number of new development opportunities, the first of which will be located in Atlanta’s Cobb Galleria area. Construction is expected to begin later this year on a 149-room Hyatt Summerfield Suites hotel in the Overton Park mixed used office complex. The hotel is slated to open in 2013.
“Noble is a strong believer in the leadership team at Hyatt and we are enthusiastic about the strategic investment opportunities we have together,” said Mit Shah, senior managing principal and chief executive officer for Noble Investment Group. “Hyatt Place and Hyatt Summerfield Suites are leading upscale brands and, along with our ability to enhance the acquired portfolio of eight hotels, we believe adding targeted new developments in prominent markets will create significant value for both of our organizations.”
The six Hyatt Place hotels and two Hyatt Summerfield Suites hotels acquired by the joint venture are: Hyatt Summerfield Suites Boston Waltham, Hyatt Summerfield Suites Miami Airport, Hyatt Place Atlanta/Perimeter Center, Hyatt Place Fairlawn/Paramus, Hyatt Place Fort Worth/Cityview, Hyatt Place Fort Worth/Hurst, Hyatt Place Minneapolis/Eden Prairie, and Hyatt Place Princeton/Carnegie Center West.