While most lodging investors and development companies are bypassing new construction and focusing on acquisition opportunities,Briad Lodging Group is taking a different approach.
The Livingston-NJ-based company sold its entire portfolio of 10 hotels on Tuesday to MCR Development for $164 million and now plans to aggressively pursue new construction projects to take advantage of lower construction costs and land prices. In fact, on the same day the deal was announced, Briad broke ground on a 120-room Homewood Suites in Atlantic City/Egg Harbor (NJ).
Briad founder and CEO Brad Honigfeld expects to have another 10 to 15 projects under contract in the next two years. It would follow Honigfeld’s strategy of building hotels into a portfolio before recapitalizing. Since 1999, Briad has built and operated 23 hotels, roughly $400 million in ground-up real estate, and then sold them in batches of two, 11 and now 10 properties.
“The Briad Lodging Group portfolio would be impossible to duplicate today and we knew it would be strategically attractive to an investor looking for the best extended-stay and focus-service brands, clustering and scale,” says Ron Danko, executive vice president, CBRE New York City Hotel Group, which brokered the deal that will likely be one of the largest of the year.