AWH Partners The AWH Strategic Income Fund is a private fund that focuses on acquiring hotel properties in the U.S. with income potential.
Current market conditions spurred the establishment of the fund, the firm’s first traditional fund, as the principals anticipate opportunities for hospitality investment in a post-pandemic world marked by higher interest rates and greater volatility. The company uses its proprietary intelligence to identify hospitality assets with potential for long-term growth. This fund launches with $20 million from AWH Partners, as well legacy investors and friends. AWH has now opened the fund up to accredited investors.
The fund has been structured to deliver steady cash flows and long-term preservation of capital through targeted investments into high-quality assets in markets that have strong growth potential. The fund is designed to provide reliable, sustainable income streams to accredited investors and to expose them to the hospitality sector. This sector is well positioned to achieve high returns in cash and to grow sustainably. It aims to achieve a balance between income generation and capital stability by focusing on premium assets, prudent market selection and catering to investors who prioritize financial resilience and sector specific opportunities.
This initiative is the direct result of the expertise of AWH cofounders and managing partners Chad Cooley, Jon Rosenfeld and Russ Flicker—all experienced real estate and finance executives, including years with Blackstone and The Related Companies, according to the company.
The fund is aiming to invest $5 million to 15 million per transaction across five to ten transactions. In most cases, it will act as the controlling equity partner. A key driver of the investment is the firm’s technology platform that tracks and analyzes more than 600 hospitality markets to enable precise asset selection, the company reports. Property affiliated with premium brands like Marriott, Hilton, and Hyatt as well as independent brands will be preferable, since they offer a higher occupancy rate and better revenue stability.
Cooley stated that “ongoing market volatility provides strategic opportunities for acquiring income-generating properties at attractive valuations.” “It’s the perfect juncture to launch this fund, as our in-house technology platform, which has been years in the making, now enables us to quickly identify and capitalize on opportunities in the hospitality sector that might otherwise be overlooked.”
According to the company, investment targets include hotels that are facing refinancing or owner fatigue because of high interest rates or inflation, as well as capital market illiquidity. This can lead to unanticipatedly long hold times for current owners.
Rosenfeld stated that “Hospitality has been one of the few asset classes to see yields increase significantly.” We see stabilized hotels trading with cap rates that are 100-200 points above their historical valuations. When borrowing costs are consistently more than 100 basis points below cap rates, these levels offer attractive current income. This is especially true when combined with Spire Hospitality’s capabilities.
Flicker said, “Our intent is to take advantage of this unmatched investment opportunity which promises to provide exceptional purchasing opportunities over the next two or three years.” We are deeply honored to have so many of trusted investors join this groundbreaking venture. We’re equally thrilled to welcome new investors to participate and become part of the AWH community.”
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