Back In the Game
A familiar name in the lodging industry is back in the game. Former Meri-Star Hospitality Chairman and CEO Paul Whetsell recently formed CapStar Hotel Co. to acquire and develop branded select-service hotels in major markets. He also struck a partnership deal with Lehmann Brothers to finance the transactions.
“In most major markets, select service has equal pricing power with other properties, and you can buy or develop them at much better cost structures,” says Whetsell. “And because of their operational nature, select service hotels are a lot easier to control from an ownership viewpoint.”
The firm will target major markets on both coasts and Chicago, initially for acquisitions and later new development. Eventually, 35 percent of the portfolio will be new-build properties. He'll use third-party managers like Interstate Hotels & Resorts to operate the properties.
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