WEST DES MOINES, IA—ParamountGroup, an independent hotel management and ownership company, has added three Midwest management contracts to its portfolio.
The three hotels recently were acquired by Lightstone Value Plus Real EstateTrust Inc., a non-traded REIT. The properties include a SpringHill Suites by Marriott and Fairfield Inn & Suites by Marriott here, and a Courtyard by Marriott in Cleveland.
Ethan Kramer, president of Paramount, said in a statement that the Fairfield, N.J.-based company expects to add 10 to 12 hotels to its portfolio this year. He said the key to capturing value in this hospitality market is finding the jewels in secondary and suburban locations that others don’t see. “More hotels are coming to market now and we expect to work closely with The Lightstone Group in the current year to help achieve their growth targets,” he said. “While thesemay not be as ‘sexy’ as a downtown urban hotel, we know that they can generate high returns with prudent risk.”
Kramer said that many hotels currently on the market have significant, brand-demanded project-improvement-plan requirements because upgrades were pushed back well beyond the normal cycle during the recent recession. “Those properties create both a dilemma and an opportunity,” he said. “Renovations can be costly and disruptive in the short-term which make these investments appear to be unattractive, but they also provide the opportunity to reposition and rebrand and become market leaders. With strategic, smart positioning and strong management, those hotels can generate superior returns.”