IFA, KREC, John Buck to develop Yotel brand
New York, June 6, 2012
IFA Hotels & Resorts (IFA) and Kuwait Real Estate Company (KREC) have partnered with The John Buck Company to develop more than $650 million worth of Yotel hotels in North America over the next three to five years.
The partnership will raise a $250 million discretionary private equity fund towards that goal, said Talal Jassim Al-Bahar, vice chairman and CEO of IFA, an international resort and residential developer.
Yotel, considered the most radical hotel in the world, together with The John Buck Company, one of the most trusted and well respected names in North American real estate development and investment, follows the opening of Yotel’s first city centre hotel in New York.
As co-general partners of the fund, Yotel and The John Buck Company will jointly identify, acquire, develop and redevelop Yotel properties in select major US metropolitan cities including projects currently being reviewed in Boston and Chicago.
The fund will leverage Yotel’s innovative hotel concept, brand and management expertise combined with The John Buck Company’s strong development reputation and prior private equity real estate fund management experience.
“Introducing the American market to the Yotel brand was a key focus in 2011 with the opening of our 669 cabin Yotel in New York which provides affordable luxury and is a solution to expensive and boring hotels,” said Gerard Greene, CEO of Yotel.
“In 2012 we have expanded this goal and are truly honoured to have the opportunity to partner with one of the most well respected developers, investors and real estate owners in the world. The formation of a dedicated real estate fund with The John Buck Company is a pivotal step in making Yotel a household name throughout North America.”
“Yotel is an extremely innovative and exciting brand and we are truly excited to be a part of their growth strategy,” said Jack Buck, principal of The John Buck Company.
“Along with our new partners in Yotel and IFA Group, we look forward to utilizing our investment expertise and development experience as we help expand the brand in North America. Given Yotel’s truly unique concept, strong operating margins, management team and ability to mass approximately 30 per cent more keys on a development site versus other hotels, it should make for a great partnership.”
The fund is currently in discussions with potential limited partners and will utilize a multi-pronged strategy for investments.
Emad Al Essa, CEO of KREC, said: “We quickly realised how rewarding our investment in Yotel New York was last year and that has driven our strategy to further expand the brand across North America.”
“The goal of the fund is to acquire existing development sites and/or condominium interests in mixed-use development projects, acquire non-hotel buildings that can be converted to Yotel hotel properties and/or to acquire select existing hotels that can be converted to Yotel hotel properties.”
The partnership anticipates an official closing of the fund in early 2013 and is immediately seeking investment opportunities throughout North America.
Al-Bahar concluded: “This is a brand that is changing the landscape of hospitality by carving out a new segment – affordable luxury. Yotel is the future and the time for investing is now.” – TradeArabia News Service