New Investment Fund to Target Hotels

A trio of hospitality veterans have teamed up to form Fairwood Capital L.L.C., a private equity fund that will acquire upscale full-service and select properties. Ed Ansbro, Robert Solmson and Richard Reiss will serve as the hotel investment fund’s principals. Ansbro is the former senior vice president for Memphis-based REIT Equity Inns Inc. Equity Inns and its 130-hotel portfolio were picked up by Whitehall Street Global Real Estate L.P. for $2.2 billion in 2007. Solmson is the former chairman & CEO of Memphis-based RFS Hotel Investors Inc., a publicly held REIT he formed in 1993 that was acquired by CNL Properties for roughly $700 million in 2003. Reiss, a former RFS board member, is the chairman of New York-based Georgica Advisors and several other private investment entities. Fairwood Hospitality Investors L.L.C. is capitalized with $150 million in equity contributed by Fairwood Capital’s principals and two institutional investors. Assuming moderate leverage of about 50 percent, Fairwood Capital will have up to $300 million in buying power that it plans to invest over the next few years. “We believe the turmoil in the credit markets, together with the prospect of a recession, the depth and duration of which is unknown, will create compelling opportunities to acquire hotels at historically attractive prices,” Solmson said in a press release. “We intend to acquire an institutional grade portfolio of premium-branded select-service and full-service hotels that will be diversified by brand, geography and market segment.” The company will initially concentrate on Marriott, Starwood–including Sheraton and Westin–and Hilton-branded properties. Solmson highlighted Fairwood Capital’s transaction-structuring flexibility. “We intend to be entrepreneurial in our approach and creative in structuring transactions, and we have the ability to move quickly,” he said. “We will work directly with owners, developers, brokers and management companies to source transactions. It is anticipated that all of the hotels will be operated by third-party management companies.”