Brooke Denihan Barrett and Patrick Denihan, owners and co-CEOs of Denihan Hospitality Group, announced that they plan to accelerate their aggressive hotel growth strategy into key U.S. urban markets, utilizing proceeds from an equity partnership with Pebblebrook Hotel Trust.
The capital investment, announced by Pebblebrook and expected to close within 90 days, gives the real estate investment trust a 49% stake in the six-hotel, 1,729-room subset of the Denihan portfolio. Included in the Pebblebrook deal are five properties operating under the Affinia Hotels brand, as well as the luxury independent, 209-room Benjamin located at Lexington Avenue and 50th Street. The additional assets – also located in Manhattan – that are owned and managed by Denihan include Affinia Shelburne, Affinia Dumont, Affinia Gardens, Affinia 50 and Affinia Manhattan, Not included in the Pepplebrook deal are the James Hotels in Chicago and New York.
Since acquiring the almost 50-year-old Denihan Hospitality Group from other family members in 2006, Denihan’s and Barrett’s long-term strategy has been to expand its capital relationships to help fuel growth of its upper upscale and luxury hotel portfolio.
After consolidating ownership, Barrett and Denihan executed a growth plan that has included acquiring The James Chicago and The James hotel brand, as well as expanding its presence into top U.S. markets — including New York City, Chicago, Washington, D.C. and Miami. Most recently, Denihan has announced the opening of The James New York-Soho as well as the addition of the Royal Palm Miami to its collection.
“We believe that current market conditions provide us with the ideal opportunity for growth,” said Patrick Denihan. “We are well-positioned as a leading investor in the hospitality community to acquire additional hotels at below-replacement cost. We have a long track-record of redeveloping boutique assets into strongly performing hotels through our world-class operating platform.”
Denihan and Barrett had been quietly shopping for a joint-venture partner for these properties for several months. While they had interest from several top hotel investment funds, according to Denihan, the Pebblebrook partnership was the right fit for both entities.