The combination of steadily improving operating fundamentals, historically low supply growth and a wave of CMBS loans reaching maturity in the next few years makes now a “fertile opportunity” for investment, says Bruce Blum. Those were also the prime reasons the industry veteran left The Chartres Lodging Group to join Allen Gross, the president and founder of GFI Capital Resources Group, and form GB Lodging, LLC.

The New York-based hotel private equity investment firm will be a “nimble, hotel value enhancement vehicle” targeting redevelopment and repositioning acquisition opportunities primarily on the East Coast, says Blum. The preference will be boutique hotel properties to take advantage of Gross’ success with the growing Ace boutique brand.

GFI is the owner, developer and asset manager of the Ace Hotel New York and the Ace Hotel & Swim Club Palm Springs (CA), as well as the operator of the NoMad Hotel New York set to open in March.

Blum says there’s no set timeframe or dollar amount for the new venture’s hotel investment. The pace will be conservative, deliberate and opportunistic, he says, with one or two deals targeted at the outset.

“We do have a preference for boutique properties, although we’ll certainly be looking at other repositioning opportunities that require a brand change — deep turnaround assets that require extensive [property improvement plans] and reflagging,” Blum says. “And we have looked at some limited service hotels because there’s so much capital chasing upper upscale and above assets in primary markets that there’s some very interesting opportunities elsewhere.”

The oncoming wave of CMBS maturities has created plenty of loans that will need “recast, restructured or recapitalized” Blum says. Couple that with 21 consecutive months of revenue per available room growth and a development pipeline that is at its lowest point since 2004, according to Lodging Econometrics, and Blum says some “pretty powerful trends are unfolding” that make the lodging sector a “fertile opportunity for investment.”

Originally posted at LHOnline.com<.a>.