Hotel mogul Mehul Patel and his company NewcrestImage have agreed to buy 45 hotels from a private equity firm, a move that comes months after the company sold most of its portfolio for 822 million dollars.
The Grapevine-based hotel company will acquire properties totaling 3,300 rooms in 11 states, including Texas. The deal includes 35 Marriott hotels, seven Hiltons, two Choices and one Radisson.
Privately held NewcrestImage would not disclose the purchase price or identify the private equity firm selling the hotel properties.
“People aren’t supposed to stay home, they’re supposed to travel,” said Patel, CEO of Newcrestimage. “They want to explore the cities, they want to explore the country.”
Newcrestimage and Patel only plan to act as property owners with the new portfolio, handing over management to Plano-based hotel operator Aimbridge Hospitality. Patel said his company also owns a third of Aimbridge’s shares.
Patel said he plans to redevelop undervalued hotels, mostly located in suburban areas. Combined with a new management company, he said he hopes a new look and new people will help struggling properties.
“These assets need capital, so there is a huge opportunity,” he said.
Eventually he hopes to sell at least part of the portfolio, a strategy Patel has used to grow the business.
Last year, NewcrestImage struck an $822 million deal to sell 27 of its hotels to Summit Hotel Properties Inc. Summit purchased the hotels in partnership with Singapore’s sovereign wealth fund GIC.
Although the sale gave NewcrestImage most of the more than 30 hotels it owned and operated at the time, the company retained the historic Magnolia Hotel in downtown Dallas and the Sinclair in downtown Fort Worth.
NewcrestImage became one of Summit’s major shareholders at the time, and since that year a subsidiary of NewcrestImage has held a majority stake in the Austin-based real estate investment trust.
With its new purchase of 45 hotels, NewcrestImage is increasing its stake in the hotel ownership game as travel rebounds from its pandemic crisis and questions swirl regarding economic conditions.
Hotel investment has been strong this year, but has slowed in recent months due to economic factors such as inflation and rising interest rates, causing market uncertainty, the economist said. from CBRE Dennis Schoenmaker on August 3 during a webinar on the outlook for the hospitality industry.
Patel said buying hotels is more financially rewarding than building new sites at the moment.
One of Dallas’ largest hotel operators, NewcrestImage is the product of three sets of two brothers who immigrated to the United States separately and started their own hotel companies. They joined forces in 2013.
The company has completed more than $3 billion in transactions in more than 200 hotels, building a reputation for dual-brand hotels and reinventing historic buildings. NewcrestImage will own 54 hotels, including its new purchase.
Since its deal with Summit, NewcrestImage has rebuilt its hotel portfolio with 15 purchases, including several in D-FW.
In June, the company purchased the 175-room Cambria Hotel in Southlake. It reached an agreement the following month with Highgate Hotels and Cerberus Capital Management to acquire four LaQuinta properties totaling 696 rooms. This purchase includes an Irving location near DFW International Airport and hotels in Phoenix, Los Angeles and Anaheim, California.
The company also purchased the Marriott TownePlace Suites Dallas Las Colinas last month. NewcrestImage plans to completely renovate this three-story, 135-suite hotel.