aley ew territory
CEO OF NEW KSL LIMITED-SERVICE , EXTENDED- STAY PORTFOLIO COMPANY MISSION HILL PASSIONATE ABOUT GROWTH POTENTIAL .
by JEFF WEINSTEIN , EDITOR IN CHIEF
reasons , haven ’ t spent much time in , and we really think it merits more consideration . The real question was , how ?”
Ultimately , KSL decided to move forward in a way that was consistent with its approach to other sectors – create a dedicated team . Among the hires to find deals and add value to the assets was Tom Barber , the former global chief development officer at Wyndham , and Mike Wilbert , who had senior roles at Tishman and Apple REIT . “ It became a logical transition for me to go and lead it because I ’ ve been passionate about the space for a long time ,” adds Kennealey , who previously oversaw direct hotel , real estate and investments at KSL .
Of the initial 12 deals that came to fruition over six months , three or four were through direct relationships with owners , and the balance came through brokers . The team is searching coast-to-coast in the U . S . and all franchised properties with brands from Marriott , Hilton and Hyatt .
Mission Hill is working with a number of the bigger , more institutional management companies at present and has no plans to get into the management business , according to Kennealey . It will continue to work with big management companies and is in conversations with others . “ We are still getting to know the different management companies in this space , learning who has particular aptitude , as certain assets have different needs ,” he adds . “ We will end up with a handful of preferred management companies .”
OPPORTUNITIES AHEAD Kennealey says getting the first dozen hotels in the stable was a big effort and he doubts Mission Hill will choose to maintain that pace – it ’ s more a function of when it finds the right deal . The team is digging in hard to source deals , but at the same time will be patient , he adds . “ It feels like the pipeline of opportunities that we ’ re going after right now is relatively robust … We are generally pursuing one-offs or onesie-twosie type transactions , but by the virtue of our partnership with KSL , we have the resources if we need to pursue and take down a larger portfolio … We have to get to some level of scale given the size of KSL for it to be appropriate for their investors . While we don ’ t have specific numbers in mind , I ’ m optimistic that we ’ ll be able to continue to grow at a pretty good pace .”
The focus is on undercapitalized , undermanaged assets where there are value-creation opportunities , Kennealey adds . “ Renovations , repositionings , upbrandings and even PIPs in certain cases become problematic for certain ownership groups , and those are all things that we ’ re really comfortable doing .”
But finding excessive distressed opportunities has not been the big opportunity and Kennealey says the big discounts have all but evaporated . “ Some of that might come back if we have another dip here in the winter . So , more to come there ,” he says .
New development is not really in the cards for Mission Hill at this
November / December 2021 hotelsmag . com 49