Development
While CapStar is under no specific constraints in terms of transaction size, individual deals will typically be in the $25 million to $75 million range. The company welcomes both individual properties and portfolios. CapStar’s core hotel acquisition profile includes:
- Select-service properties—These hotels typically have 125 to 400 rooms with limited food and beverage operations and meeting facilities. The company will work with flags from all of the leading brands. CapStar prefers relatively new properties, typically less than 10 years old and located in city center and major suburban locations.
- Independent hotels and non-hotel buildings—These hotels typically will be older and in need of a major renovation and repositioning. Hotels will have 100 to 300 rooms. Food and beverage and meeting operations will not play a major role in the hotel’s business. CapStar also seeks non-hotel properties, such as apartments, office buildings, etc., that can be completely retrofitted and converted into a hotel. Upon completion of refurbishment and repositioning, these properties typically will become branded select-service hotels or upscale independent or boutique hotels.
The company’s development activity will focus on select-service hotels similar to CapStar’s acquisition profile. Over time, the portfolio is expected to consist of approximately 65 percent acquired hotels and 35 percent new development.
CapStar also welcomes potential acquisition candidates and new developments surfaced by the leading brands and third-party independent management companies. CapStar will work with any operator who has highly effective operating expertise and systems, strong sales and marketing skills and a track record of achieving targeted rate, occupancy and RevPAR goals.
To discuss potential acquisition candidates or development sites, please contact Gary Klett at
gary.klett@capstar.com.