New Castle Hotels and Resorts, a leading developer and converter of upper upscale hotels, today announced plans to open four hotels this year, setting the stage for an unprecedented period of growth of the company’s portfolio of owned and managed hotels.
“There are opportunities in every cycle, and we spent considerable time during the downturn strategically sourcing deals that would come online as the market regained full steam,” said David Buffam, CEO. “Those hotels, including new builds, historic renovations, luxury resorts and a select service combination property will expand the rooms in our portfolio by 20 percent. We also have a substantial pipeline of diverse projects that will mature as the year progresses.”
Repositioning Historic Icons
Headlining the company’s plans is the reopening of the Algonquin Resort in St. Andrews by-the-Sea, NB, and with it, the Canadian debut of Marriott’s Autograph Collection. New Castle acquired the landmark resort in April of 2012 and is undertaking a $30 million reconstruction that will be completed in Q2 2013.
“New Castle has a history of turning around Canada’s historic, iconic resorts and positioning them to meet the needs of a new century’s travelers,” said Gerry Chase, President and COO.
“When the Algonquin became available, we knew that we had the background, the experience and the heart to properly restore and reposition a treasured Canadian landmark.”
New Castle’s first historic repositioning venture was the 1996 acquisition of The Nova Scotian hotel in Halifax, branding it as the first franchise Westin in Canada. Since then, New Castle has operated the province-owned signature resorts – the Keltic Lodge, in Ingonish, NS, Digby Pines Golf Resort and Spa, Digby, NS, and the Liscombe Lodge, Liscomb Mills, NS for the past 12 years.
More recently, Portland’s famed Eastland Park Hotel is undergoing a total $50 million renovation to emerge as the Westin Portland Harborview in Q2 2014. New Castle teamed with Rockbridge Capital in this acquisition.
“We have developed a sweet spot for acquiring under-managed, under-flagged, undercapitalized assets and restoring them to good health,” Chase said. “Both the Algonquin and the Eastland are perfect examples of independent hotels that will benefit from carefully designed renovations, well-considered flag selection and solid management that respects the hotel’s history.”
While industry intelligence has forecast another year of limited new capacity, (393 new builds for 2013, according to Lodging Econometrics), New Castle’s development pipeline is stronger than ever with a combination Residence Inn and Courtyard by Marriott nearing completion in Syracuse’s Armory Square and a new Westin ready to break ground in Jekyll Island, Georgia.
“Conventional wisdom says that debt is in short supply for new construction, but we’ve found that savvy investors are always interested in well-conceived projects,” said Chase. “As strategic developers, we’re willing to invest the time and sweat equity to uncover the pockets of unmet demand.”
The Inns at Armory Square, scheduled to open in May, 2013, features a 78-room Residence Inn and a 102-room Courtyard by Marriott under one roof. The project is downtown Syracuse’s first new build hotel in more than 50 years and the largest, non-office building endeavor in more than 25 years. The hotels will complete the renaissance of the Armory Square section of downtown Syracuse, an urban lifestyle center of shops, restaurants and theaters a short distance from the University.
The Westin Jekyll Island Hotel, a 200-room oceanfront hotel, will break ground later in Q1 and will become the anchor hotel for Jekyll Island’s new convention center, which was completed in May 2012. The convention center is poised to host some 120 events per year and was conceived to help revitalize the Island as a leisure and conference destination. The hotel is one of only a handful of convention center hotels currently in the works.
“There always are plenty of takers for big, high profile deals in obvious markets,” Chase added. “Experience has shown us, however, that a carefully selected, challenging deal in an unexpected market can be just as rewarding.”