Certares, a global investment firm focused exclusively on the travel and hospitality industries, has completed the final closing of its first real estate hospitality fund, Certares Real Estate Holdings I LP, with $284 million of equity commitments.
Certares Real Estate builds on the firm’s expertise and track record in private equity and credit investing across the travel and hospitality industries, the company reports. The strategy is focused on acquiring hospitality real estate assets in growth markets and gateway cities across the U.S., leveraging the firm’s industry relationships to identify attractive investments.
Since its launch in March 2021, the fund has made investments in 10 hotels, investing approximately $228 million of fund capital in equity investments. Its acquisitions include the Sea Crest Beach Hotel in Cape Cod, the Courtyard San Diego Downtown and the EAST Miami. The fund has generated a net IRR of 35% and a 1.4x multiple on invested capital as of March 31, and has already made distributions to investors while maintaining an active pipeline of new investments.
“A targeted real estate strategy is a natural extension of our experience in travel and hospitality and provides another avenue for us to create value for our investors by capitalizing on our extensive industry expertise,” said Greg O’Hara, founder/senior managing director, Certares. “COVID-19 caused unprecedented disruption across the entire travel industry. As demand has returned robustly, hotels represent a category where investors who know the industry well can identify attractive assets. We are thrilled with the performance we have delivered for our valued investors thus far and appreciate their support for this strategy.”
Nolan Hecht, senior managing director/head of real estate, Certares, added, “We are pleased with the portfolio we have built to date and believe there is ample runway for our strategy of acquiring well-located, high-quality hotels in growing markets that display both strong leisure and corporate demand fundamentals. The current market environment is especially well-suited for a specialized travel and hospitality investor like Certares to deliver differentiated value for investors and portfolio assets. We look forward to growing a leading real estae hospitality platform that benefits all of our stakeholders.”
