First Hospitality has opened First Investors, its dedicated hotel real estate investment platform, to qualified outside investors. Concurrently, the firm also unveils First Investors GP Fund, which expects to supply sponsor capital for a targeted $400 million in U.S. hotel investment over the next 12 to 36 months.
The platform is led by CEO David Duncan and governed by a seasoned ownership group: Sam Schwartz, executive chairman; Stephen Schwartz, founder/chairman emeritus. Collectively, the three executives have led more than $10 billion in hospitality transactions across value-add, ground-up and adaptive-reuse strategies.
Since 1985, First Investors and its affiliates have completed 45 hotel transactions, generating a 3.9x multiple of invested capital with an IRR over 20% on realized exits and currently own significant joint-venture positions in 18 hotels totaling 3,100 keys. Current representative investments include the Hiltons at McCormick Place (Chicago), Hotel LeVeque, Autograph Collection (Columbus, OH), Tempo by Hilton Louisville Downtown NuLu (Louisville) and the newly opened Hotel Ardent, Tapestry Collection by Hilton (Dayton, OH).
“First Investors benefits from direct alignment with our operating platform, providing early visibility into local market dynamics and operational trends well before they appear in public data,” said Duncan. “This vertical integration provides a differentiated advantage for our investors, particularly in today’s market environment, where dislocation is creating some very unique investment opportunities.
First Investors will focus on deploying the GP Fund alongside a select group of existing capital partners and other investors into a portfolio of six to 10 hotels, targeting 150- to 350-key, premium-branded or independent lifestyle assets located in growth markets with multiple demand generators.
“Our GP Fund is all about alignment—approximately 20% of the fund will be our own capital, giving the firm and its senior leaders substantial skin in every transaction,” said Sam Schwartz.
Stephen Schwartz added, “Bringing this platform to outside investors is the natural evolution of work we’ve been doing privately for 40 years through five lodging cycles.”
