- L.T.D. Hospitality Group agrees to contribute nine
Virginia-based hotels including IHG and Marriott brands to Caliber
Hospitality Trust; the second of several planned contributions
- Upon closing, the contribution will expand Caliber
Hospitality’s portfolio to 15 hotels from six and more than double
its portfolio valuation to $405 million
- Contribution will also increase Caliber’s FV AUM by 25% and its
asset management revenue run rate by approximately $2 million, or
20%
CaliberCos Inc. (NASDAQ: CWD) (“Caliber”), a leading vertically
integrated alternative asset manager, today announced that it has
reached an agreement with L.T.D. Hospitality Group LLC (“L.T.D.”)
in which L.T.D. has agreed to contribute nine hotel properties to
its subsidiary, Caliber Hospitality Trust (“CHT”), an externally
advised private hospitality corporation. The transaction is subject
to customary closing conditions and is expected to close by the end
of the third quarter of 2023.
Based in Virginia Beach, Va., L.T.D. is a hospitality management
and development company founded in 1983, led by managing principals
Neel Desai and Malay Thakkar. All nine properties to be contributed
by L.T.D. are in Virginia and include a mix of upscale to upper
upscale hotels across multiple IHG and Marriott brands.
Formed in 2022, CHT accepted its initial contribution of six
hotels in Arizona in the first quarter of 2023 from Funds managed
by Caliber. The value of this initial portfolio was approximately
$186 million as of June 30, 2023.
The execution of a contribution agreement with L.T.D. marks
CHT’s second contribution of assets, which, upon transaction
closing, will grow CHT’s assets under management (“AUM”) to $405
million. Under the terms of the contribution agreement, L.T.D. will
receive cash and/or operating partnership units (“OP Units”) in
exchange for the contribution of its nine hotels.
Upon closing, this addition will more than double the value of
CHT’s current portfolio to $405 million and increase Caliber’s FV
AUM1 by approximately 25%. In addition, Caliber’s asset management
revenue run rate will further increase by approximately $2 million,
or 20%2, considering the value of the portfolio contributed and the
terms of the contribution and management agreements. Caliber is in
active discussions with other potential third parties and expects
to make additional announcements in the second half of 2023.
Commenting on CHT’s plans for growth, Caliber CEO Chris Loeffler
said, “We believe there are a substantial number of hotel owners
across the U.S. who are looking for a compelling alternative to
asset sales to access liquidity, reduce and extend debt, pay for
property improvement plans, or access well-priced operating and
growth capital. These hoteliers are typically highly experienced
professionals – second or third generation hotel owners – who are
committed to their businesses and see the opportunity that comes
with greater scale and access to permanent capital. The Caliber
Hospitality Trust offers these potential benefits to contributors
who also see a moment in time when distressed assets may offer
discounted purchase prices.
“Our model allows our contributor partners to do what they do
best – own, invest in, and operate successful hotels – while
Caliber provides capital, expertise and other resources including
technology, data and analytics, training, and business support
services so they can continue to grow their businesses. This
partnership enables CHT to expand its real estate portfolio, while
also attracting talented and experienced hotel executives with a
proven track record of success, deep local market and hospitality
sector knowledge, and valuable relationships.
“L.T.D. is an ideal first contributor that validates our
strategy. We are very excited to welcome Neel Desai and the L.T.D.
team to CHT. Neel has decades of experience, and we look forward to
him joining Caliber Hospitality’s Board of Directors to help guide
our growth.”
“We are thrilled to join forces with Caliber and CHT and look
forward to working closely with the entire Caliber team,” said Neel
Desai, managing principal of L.T.D. Hospitality Group. “When L.T.D.
bought its first hotel in 1983, we dreamed our business would grow
within the Hampton Roads region, known for its thriving economy
from industries such as defense, tourism, healthcare and education.
Forty years later, our dreams are coming true, and now we have more
exciting opportunities ahead by partnering with Caliber Hospitality
Trust. We share Caliber’s entrepreneurial approach and growth
mindset and are excited to leverage their deep real estate
expertise, capital resources and robust operating platform to take
our business to the next level while working to create value for
all of CHT’s shareholders.”
L.T.D.’s contribution will expand Caliber’s multi-state
footprint into Virginia, another vibrant growth market. Hampton
Roads comprises the Virginia Beach-Norfolk-Newport News
metropolitan area, which has a population of approximately 1.8
million. The region is known for its significant military presence
and home to the Port of Virginia, one of the busiest ports on the
East Coast. The area is a tourist mecca with 3,000 miles of
shoreline with beautiful beaches and hundreds of historical sites
and attractions, including Colonial Williamsburg, the historic
Jamestown Settlement, the Virginia Air and Space Museum, and Busch
Gardens.
Founding Contributors have the opportunity to receive operating
capital and an immediate ownership stake in the company through a
tax-free exchange for OP Units. Caliber has set a target date of
September 30, 2023, for potential partners to sign term sheets to
contribute their hotels to CHT. Interested parties should reach out
to Invest@CaliberCo.com for additional information.
About CaliberCos Inc.
Caliber (NASDAQ: CWD) is an alternative asset management firm
whose purpose is to build generational wealth for investors seeking
to access opportunities in real estate. Caliber differentiates
itself by creating, managing, and servicing proprietary products,
including middle-market investment funds, private syndications, and
direct investments, which are managed by our in-house asset
services group. The Company leverages access to both the public and
private markets to maximize value for its customers and funds. Our
funds include investment vehicles focused primarily on real estate,
private equity, and debt facilities. Additional information can be
found at Caliberco.com and CaliberFunds.co.
About Caliber Hospitality Trust
Caliber Hospitality Trust (“CHT”), an externally advised private
hospitality corporation, is a subsidiary of CaliberCos Inc.
(NASDAQ: CWD). Led by an experienced team of agile entrepreneurs
and specialists, CHT offers a unique opportunity in an UPREIT
transaction for hotel owners and managers to access scale on a
tax-deferred basis. CHT is targeting middle-market full service,
select service, extended stay, and lifestyle hotels in attractive
geographic locations. CHT’s asset management technology enables
management of mixed asset classes, top-tier brands, and third-party
managers, who all interact via an integrated platform.
About L.T.D. Hospitality Group
Founded in 1983, L.T.D. Hospitality Group is headquartered in
Virginia Beach, Va., and is comprised of several key lodging-sector
business units, including Asset Management, Hotel Management, and
Development. L.T.D. is recognized as a distinguished leader in the
hospitality industry with a portfolio of premium-branded properties
and fast casual eateries.
Forward Looking Statements
This press release contains “forward-looking statements” that
are subject to substantial risks and uncertainties. All statements,
other than statements of historical fact, contained in this press
release are forward-looking statements. Forward-looking statements
contained in this press release may be identified by the use of
words such as “anticipate,” “believe,” “contemplate,” “could,”
“estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,”
“potential,” “predict,” “project,” “target,” “aim,” “should,”
"will” “would,” or the negative of these words or other similar
expressions, although not all forward-looking statements contain
these words. Forward-looking statements are based on the Company’s
current expectations and are subject to inherent uncertainties,
risks and assumptions that are difficult to predict. Further,
certain forward-looking statements are based on assumptions as to
future events that may not prove to be accurate including, but not
limited to, the closing of the transaction with L.T.D. Hospitality
Group LLC. These and other risks and uncertainties are described
more fully in the section titled “Risk Factors” in the final
prospectus related to the Company’s public offering filed with the
SEC and other reports filed with the SEC thereafter.
Forward-looking statements contained in this announcement are made
as of this date, and the Company undertakes no duty to update such
information except as required under applicable law.
1 Fair value assets under management is defined as the aggregate
fair value of the real estate assets the Company manages from which
it derives management fees, performance revenues and other fees and
expense reimbursements, as of June 30, 2023. 2 Asset management
revenue run rate is an estimate that annualizes asset management
revenue, which are on a basis that deconsolidates the consolidated
funds, for the month ended June 30, 2023.
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version on businesswire.com: https://www.businesswire.com/news/home/20230810147698/en/
Caliber: Samantha Vrcic +1 480-295-7600
Samantha.vrcic@caliberco.com
Media Relations: Kelly McAndrew Financial Profiles +1
203-613-1552 KMcAndrew@finprofiles.com
Investor Relations: Julie Kegley Financial Profiles +1 310 622
8246 jkegley@finprofiles.com
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