Life House Secures $100M in RE Equity Capital

NEW YORK—Lifestyle boutique hotel company Life House has secured $100 million in equity commitments (approximately $250 million to $300 million in total asset value) from Boston-based investment and development firm Blue Flag Partners to fund its continued expansion through the acquisition of seven to 10 additional hotels.

“Since day one, we have been acutely focused on driving value to our hotel owners through technology advantages and contextually responsive design, and we’re thrilled to see that Blue Flag has recognized this value and formalized a long-term partnership with us,” said Rami Zeidan, CEO/founder, Life House. “To date, we have only raised $10 million in venture capital, and this partnership further demonstrates our ability to scale a lifestyle hotel brand and management company in a capital-efficient manner to maximize returns for our venture capital investors.”

“We selected Life House after a competitive process, and we’ve quickly seen the massive value they’re able to create,” said Terry Sanford, co-founder, Blue Flag. “Since we closed on the acquisition this past spring and in advance to repositioning the asset, they are already driving approximate 40% higher total revenue with nearly 80% direct web bookings. We’ve been very impressed with Rami and the Life House team, and we’re actively looking to build our portfolio with them around the country.”

The agreement follows the news that Life House took over the operation of The Roberts Collection, a 58-room hotel in Nantucket, MA, acquired by Blue Flag in April. This season, Life House is operating The Roberts Collection as part of its white-label, tech-enabled management platform and will begin restoration of the hotel in fall 2019, transforming the property into a locally rooted hotel by Life House.

Life House has leveraged its venture-backing from investors including Global Founders Capital, Comcast Ventures and Trinity Investments to develop proprietary technology that drives incremental revenue and automates operational efficiencies, yielding a 30-50% higher return on hotel investments for its real estate partners than traditional management companies, the company reports. Through the repositioning of the Nantucket project alone, Life House is projected to increase NOI by 100% per year, translating to a $15 million increase in the value of the property and catalyzing Blue Flag’s interest in a partnership to grow a larger scale platform.

During its first year of operation, Life House has signed more than 500 rooms across nearly 10 projects, spending less than $5 million of venture capital and positioning the company to raise a Series B this summer. By 2020, Life House will have more than 20 hotels open or under construction across the U.S., in markets including Nantucket, MA; Brooklyn, NY; Denver; and Lake Tahoe, NV.