Russ Urban believes Electra America Hospitality Group , a joint venture between real estate private equity firm Electra America and luxury longer-stay expert AKA , has its timing right to deploy a recently closed US $ 700 million fund and take advantage of sellers looking to shed non-core assets to prop up their businesses and meet their liquidity needs .
Even better , says Urban , CEO of Electra America Hospitality Fund I ( EAHG I ), is the somewhat unique and narrow niche the new group targets – luxury and 4-star , multi-night stays with a hybrid boutique hotel and serviced residence offerings that AKA President Larry Korman likes to call “ vertical villages .” For example , a recently acquired new-build in West Palm Beach , Florida , will feature studio , one and two-bedroom layouts ranging from 351 square feet to over 840 square feet . Originally designed as micro-apartments , all suites and residences will have a kitchen or kitchenette to cater to longer-stay guests .
“ We believe that with demand and travel patterns changing that this could be a great time to continue to expand and help AKA expand its strategic footprint ,” Urban says . “ It ’ s all driven from finding a niche within a rather large business … We have the ability to bob and weave with the right product in the right markets – something you can ’ t do freely with some of the larger brands .”
The new fund also acquires assets in markets where there ’ s a big diversity of demand between leisure and corporate . “ We can basically do a direct sales effort to drive business ,” Urban says . “ We rely very little on OTA business and the average length of stay for the portfolio is about nine days … The key is to have the right number of rooms in the right markets . It does not work in suburban markets , although we might consider resort settings .”
To date , the fund , in which AKA is an investor , has acquired four assets and fund CEO Urban says deals in Boston and Washington , D . C . were close to being added . In mid-June , EAHG I had already deployed US $ 200 million of capital for the acquisition , including seed assets such as a 194-key boutique hotel in
WE HAVE THE ABILITY TO BOB AND WEAVE WITH THE RIGHT PRODUCT IN THE RIGHT MARKETS – SOMETHING YOU CAN ’ T DO FREELY WITH SOME OF THE LARGER BRANDS .
– RUSS URBAN
Manhattan ( Hotel AKA Nomad ), a 178-key hotel in the heart of Old Town Alexandria , Virginia ( Hotel AKA Alexandria ), a 201-key high-rise hotel in Brickell , Miami ’ s financial district ( Hotel AKA Brickell ) and a brand-new property in downtown West Palm Beach , Florida , that will be called AKA West Palm . The Brickell property was the only one open by late spring as the others are going through renovations . Again , if their timing is right and the market is back to optimal trading levels by 2024 , the initial set of assets should be humming along from a GOP perspective .
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