US-based hospitality-focused real estate investor Trinity Investments is ambitiously targeting €1.5 billion in hotel assets across Europe within the next three years.
Following the opening of its new office in London last October, Trinity’s managing partner Ryan Donn revealed exclusively to Hospitality Investor that the company is on a path to replicate its success in the US in Europe.
“Mission accomplished is when we own about €1.5 billion of hotels in Europe in phase one. We own a little over $5 billion of hotels in the US I'd like to own roughly a third of that size in Europe and over the next three to four years. Like we are in the US, I want the European office to be one of the top numbers that people dial when they want to own a hotel and want help,” he said.
He adds: “We've gone from a team of one when I arrived to now a team of six over the past eight months. I see our office in Europe being 10 to 12 strong by the time Phase One has been achieved.”
And it seems Trinity is on track – just on Wednesday this week, the company announced the addition of a further four members to its London leadership team. Joining from Savills, Mai Kawashima stepped into the role of vice president of acquisitions, new director of strategic operations George Austin joined from KSL Capital Partners, vice president of development Elia Antonioudaki joined Trinity from L&R Hotels, and Andrea Hendrick joined from Oaktree Capital Management as vice president of finance.
All of this comes hot on the heels of the April acquisition of 138-key luxury hotel Park Hyatt Zurich by a joint partnership between Trinity Investments, funds managed by Oaktree Capital Management and funds managed by UBS Asset Management’s Real Estate & Private Markets Multi-Managers business.
Donn added: “With the Zurich deal being the first of the London office, we’re about 20 per cent of our way to that target. So if we can find four or so more of the same size, then we’re on track.”
In terms of future plans for Park Hyatt Zurich, Donn says to expect a few changes.
“The hotel has been open for 20 years and while that means it’s at the younger end of a lot of classic hotels in Europe, it’s old enough for some concepts to be refreshed. For example, restaurant concepts that have been around and relatively unchanged for 20 years can be made more relevant.”
He adds that as it’s a mixed-use asset, the company is exploring expanding the hotel footprint as the contracts of some office tenants come to an end. “It’s a very high occupancy and very high rate market so it’s one in which we think the hotel is of better use than some of the office space that was there. We’ll see a little bit of conversion if all goes to plan and I think we'll make what's already a great asset much better.”
Being one the largest buyers of hotels in the US in 2023, Donn says he views Trinity’s expansion across the pond as a natural extension to its activities in the States over the past 30 years.
“Trinity’s thirtieth anniversary is next year, and we've created quite an enterprise for ourselves in the US. Many of our global investors have encouraged us to explore similar opportunities in Europe. For us, it's a natural extension of what we’ve proven ourselves capable of in the US,” Donn said.
And the company is already eyeing various opportunities across the region, with the strategy involving exploring a wide range of markets, leaving no stone unturned.
“Right now, we’re looking at a situation in Athens, a resort in coastal Spain, there are package smaller hotels as well as larger single assets in London which we’re spending a little bit of time with, we’ve looked at Dublin, we'd love to be in Amsterdam, Paris if we find the right entry point although that's a tricky one to enter. We’re hunting for deal number two after Park Hyatt Zurich which was a significant undertaking for us. We hope to secure more assets before the end of the year, but things are moving a bit slower here than in the US,” Donn says.
He explains that in Europe, the company is exploring opportunities starting from the luxury and upper-upscale segments.
“We’re looking at upper upscale, borderline luxury, and down but not necessarily all the way to limited services.”
Turning to trends, he notes “We’re seeing a trend towards blending hospitality with residential, a concept that will likely grow. Generally, we don’t develop but if we were to acquire and hold it, I do like extended stay and aparthotel types of products in urban centres,” he added.
And Trinity Investment’s partnership with Partners Group is set to play a vital role on Trinity’s expansion. Partners Group acquired a strategic minority stake in Trinity in April to support the company’s future growth, with Partner’s initially targeting a $500 million investment and possessing the opportunity to commit further capital to Trinity’s North American, European and special situations investment platforms.
“We have a history with Partners Group in the US. Being a Swiss-based company, they have a very strong team in Europe and being as globally relevant as they are, have a very strong team in the US too. And so they’re very much aligned with wanting to accomplish what we're doing in both regions.”
“We're going to continue to look for assets and opportunities like the Zurich asset, like the Ritz Carlton in Dallas which we own together, like The Scottsdale Plaza Resort & Villas which is a good value-add opportunity and which we’ll be elevating. And we're also probably going to be expanding into special situation spaces – we’re seeing opportunity to plug holes in capital stacks.”
It seems for the next few years, Trinity Investments will be very busy indeed as it seeks to build and cement its position in the European hotel sector.