BitNile Holdings subsidiary acquires four hotels for $69M

BitNile Holdings subsidiary Ault Alliance Inc., through its subsidiary Ault Global Real Estate Equities Inc. (AGREE), has acquired three hotels located in Middleton, WI, a suburb of Madison, and one hotel in Rockford, IL. Consisting of an aggregate of 526 rooms, the acquisition includes two Marriott hotels (a Courtyard by Marriott and a Residence Inn by Marriott) and two Hilton Garden Inn hotels.

Ault Alliance formed AGREE earlier in 2021 to invest in commercial real estate, including hospitality and multi-family housing properties, with a concentration in the middle-market segment.

This acquisition constitutes AGREE’s first commercial real estate investment, consisting of the 136-room Courtyard Madison West/Middleton; the 133-room Hilton Garden Inn Madison West/Middleton and the 122-room Residence Inn Madison West/Middleton in Middleton, WI, as well as the 135-room Hilton Garden Inn Rockford in Rockford, IL.

BitNile paid $69 million for the hotels, with $23.9 million paid at closing in cash; the balance of the purchase price was financed through construction loan agreements. Over the next 18 months, AGREE plans to renovate the hotels through a $13.7-million property improvement plan. The hotels will be managed by GF Hotels & Resorts.

AGREE has partnered with Joshua Caspi of Caspi Development, a real estate developer based in New York with expertise investing in hospitality, office and multi-family experience developments. BitNile had previously co-invested with Caspi Development in the Hotel Barrière Le Fouquet’s New York in Manhattan.

“We are extremely pleased to acquire this premium-branded and stabilized portfolio of assets in an attractive and growing region of the country, set in a state capital and anchored by a major state university, as our first acquisition through AGREE,” said Christopher Wu, president, Ault Alliance and CEO, AGREE. “We believe these assets will provide AGREE and thereby the BitNile with attractive yields and potentially serve as a model for other commercial real estate transactions. We are also excited to partner with Joshua Caspi, a real estate developer and investor who brings considerable expertise, to help us manage and grow our real estate portfolio.”

Milton “Todd” Ault III, founder/executive chairman, BitNile added, “Bringing a team together like this has been my vision for 20 years, and I am enthused and proud to say we have made this a reality today. We have a team of professionals to execute and bring these four hotels to their peak performance. We look forward to growing our hotel portfolio.”

BitNile previously announced a plan to split into two public companies by distributing the equity of Ault Alliance to its stockholders. Following the spin-off of Ault Alliance, BitNile, through its BitNile Inc. subsidiary, will be a pure-play provider of Bitcoin mining and data center operations, pursuing DeFi-related initiatives. Ault Alliance will maintain its focus on BitNile’s legacy businesses and more recently initiated operations, including lending and investing in the real estate and distressed asset spaces.

The seller was a joint venture between North Central Group (NCG) and Raymond Management Company (RMC).

Jeff Lenz, president/chief development officer, NCG, said, “The sale of these four mature properties in our portfolio provides us with additional capital and resources to develop and operate new and larger projects we are excited to be working on, The Trade Milwaukee, an Autograph Collection Hotel, in partnership with the Milwaukee Bucks organization, and the Moxy Madison Downtown, a Marriott Hotel.”