JRK Property Holdings has acquired the 179-room Ace Hotel & Swim Club Palm Springs in Palm Springs, CA, from an affiliate of GFI Capital.
JRK acquired the resort through its $350-million Hospitality Fund, which focuses on cash-flowing full- and select-service hotels for value-add and core-plus investments across the country. It targets transactions of $20 million to $250 million, but can acquire up to $1 billion for portfolios or large single assets.
The Ace Hotel, which opened in 2009, comprises seven buildings across a 5.04-acre campus, including three food and beverage venues, a spa and 7,500 sq. ft. of event space. The hotel has a unique stronghold on the upscale boutique hotel market in Palm Springs—a market with more than 14 million visitors annually and growing from expanded airport routes, the new Acrisure arena and growth in drive-to leisure demand, with a stable base of annual demand from events in Coachella Valley, the company reports.
“This was an outstanding opportunity to acquire a strong cash-flowing resort with multiple levers to drive value,” said Shaan Bhatia, SVP/head of hotels, JRK, who joined the company last year from Starwood Capital to lead JRK’s hotel investment platform. “Ace Hotel & Swim Club is a truly unique offering in Palm Springs, and by retaining strong in-place management, we can leverage the brand equity and depth of talent to continue being a market leader. We intend to invest significant strategic capital to elevate the property and enhance the guest experience in the rooms and public spaces, as well as generate incremental returns for our investors.”
JRK, after closing on this property, still has more than 80% of its Hospitality Fund uninvested and aims to deploy the remainder of the fund by the end of 2023.
“As long-term holders with a strong capital base, JRK is primely positioned to invest through various market cycles and short-term volatility for quality assets,” added Danny Lippman, president, JRK Property Holdings. “We anticipate a significant pickup in deal volume over the next 12 months given the current dislocation in the credit markets, which should prompt attractive buying opportunities.”
Eastdil Secured brokered the transaction on behalf of the seller.