Insignia/ESG acquires hospitality broker Hotel Partners

Real Estate Weekly, May 20, 1998

Hotel Partners, which sells more hotel properties annually than any other brokerage firm, will operate within Insignia/ESG's Capital Advisors Group, which focuses on investment sales and debt placement internationally. Hotel Partners' three principals, Bill Gudenau, chairman, Paul Jones, president, and Russ Urban, executive vice president, will become senior officers within Insignia/ESG Capital Advisors.

"We are elated by Hotel Partners' decision to join our company," said Stephen B. Siegel, president and CEO of Insignia/ESG. "The hospitality segment was a missing component in our worldwide offering of sales and financing services. Now we've filled that void with the best firm in the business, and instantly become a leading player within the hospitality segment, not only in the U.S., but internationally as well."

Hotel Partners, founded in 1990, was responsible for the sale of 115 hotel, motel and resort properties during 1997. The second most-active firm produced approximately half as many transactions. The firm covers the full gamut of hospitality real estate, having consummated sales transactions in 1997 ranging from the six-property Medallion portfolio in Texas, Oklahoma and Kentucky, which was purchased by CapStar Hotel Company for $150 million, to a former Holiday Inn in Plattsburg, NY, which sold for $650,000. High-profile properties sold by Hotel Partners last year include the Marriott Seaview Resort in Galloway, NJ; the Crowne Plaza in New Orleans; and the Sheraton Burlington (Vermont) Hotel & Conference Center.

"We were attracted to Hotel Partners by their broad coverage of the hospitality industry and their emphasis on international expansion, which coincides precisely with our own plans," said Kevin F. Haggarty, executive managing director of Insignia/ESG Capital Advisors. "They are able to capture opportunities which firms that are focused on only one segment of the hotel industry often overlook. Plus, diversity of product keeps their book of business constantly full through all stages of the market cycle. We could not ask for a better complement to our current focus on major office, industrial, multi-family and retail properties."

Hotel Partners' decision to join forces with Insignia represents the first consolidation within the service side of the hospitality industry, which has seen hotel companies swept up in merger-and-acquisition activity. "Our merger with Insignia breaks new ground and, we believe, ups the ante for real estate service providers in the hospitality industry," said Gudenau. "We are joining a company with strong institutional ties and one that is committed to setting a new standard of excellence in real estate services. We could not be more excited about our prospects."

Hotel Partners, based in Chicago, has seven additional full-service offices in the U.S.: New York, Los Angeles, Dallas, Miami, Atlanta, Honolulu and Boston. In overseas markets, Hotel Partners has operations in London, Frankfurt, Tokyo, Singapore and Hong Kong. Its international reach dovetails with Insignia's plans to provide commercial real estate services on a global basis. The company acquired Richard Ellis Group Limited, the premier real estate service provider in the United Kingdom, in February, and CAGISA, a full-service real estate company in Italy, in 1997.

Hotel Partners is well known for its far-ranging expertise within the hospitality industry. The company is the organizer of the UCLA Hotel & Investment Conference, the industry's premier real estate conference, and together with UCLA, launched a Latin American and Caribbean investment forum two years ago. This year, Hotel Partners inaugurated the first European hotel investment forum, held in Berlin, in partnership with Hotel & Motel Management magazine.

The company employs approximately 70 people, including 29 brokers, on a worldwide basis. In 1997, Hotel Partners sold nearly $1 billion of hotel, motel and resort properties, and so far this year has engagements to sell and finance hotel properties, as well as to create hotel companies, in more than 20 countries.