Development

While CapStar is under no specific constraints in terms of transaction size, individual deals will typically be in the $25 million to $125 million range. The company welcomes both individual properties and portfolios. CapStar’s core hotel acquisition strategy is currently focused on existing independent hotels, properties that can be converted to an independent from a branded hotel, or more substantive conversions from residential or office space. 

The targeted markets will be the major gateway cities including Los Angeles, New York, San Francisco, Chicago, Washington D.C., San Diego, Miami, Boston, Seattle and Las Vegas. 

CapStar welcomes potential acquisition candidates surfaced by the leading brands and third-party independent management companies.  CapStar will work with any operator who has highly effective operation expertise and systems, strong sales and marketing skills and a track record of achieving targeted rate, occupancy and RevPar goals.

CapStar is seeking to acquire hotels that meet these basic criteria::

Property Types: upscale orientation, brand flexibility

• Full Service hotels suitable for premium Upper/ Upscale Brands
• Hotels suited to operation as Independent/ Lifestyle/ Boutique properties
• Select Service hotels in traditional urban centers or "Edge City" locations

Size/ Character: medium scale, operating hotels, value-add/opportunistic plays

• 100 to 350 rooms, commercial orientation, with group and leisure appeal
• Flexible meeting space
• Ample production and service areas for market-competitive F&B operation
• Adequate public areas for appealing fitness, business services and entertainment

Markets: large, multi-segment lodging markets, with East Coast preference

• Eastern Seaboard: New York, Boston , Washington, Miami, Philadelphia, Charlotte, Baltimore, Atlanta, Orlando, Tampa
• West Coast: San Francisco, Los Angeles, Seattle, Las Vegas, San Diego
• West/Midwest: Chicago, Dallas, Denver, New Orleans, Minneapolis, Kansas City
• Other: markets with robust demand segmentation and proven ADR potential

Management: all properties to be operated by third party management companies

• Independent operators – particularly those with an angle on new acquisition targets, and those aiming to recapitalize properties already in their portfolios
• Brand operators – we can collaborate to expand their systems through re-flagging, to solve QA and PIP problems, or to meet balance sheet and owner recap needs

Value-add/Opportunistic:

• Add value through selective cap ex programs, fixing guest service basics, re-imaging through up-branding, supporting aggressive marketing
• Realize opportunities by acting quickly, responding decisively to complex distress situations, financial and/or operational
• 3 to 5 year hold