John Pritzker And Lowe Sell $2B Hotel Management Company To Hyatt
John Pritzker may not be rejoining Hyatt, the family company he left in 2010, but he just sold one of his biggest ventures to the hospitality chain.
Geolo Capital, the private equity firm that invests Pritzker's fortune, has agreed with Lowe to sell their joint venture Two Roads Hospitality to Hyatt Hotels Corp., Geolo announced in a press release. Jay Pritzker, John's father, founded the Hyatt chain in 1957. Hyatt paid $480M for Two Roads, which manages over $2B in assets, Bloomberg reports.
Geolo founded the hotel management company Commune Hotels and Resorts after acquiring California's Carmel Valley Ranch in 2009 and added Joie de Vivre Hotels in 2010. Commune acquired Thompson Hotels in 2013 and Alila Hotels in 2014, then merged with Lowe's Destination Hotels to form Two Roads in 2016. At the time of purchase, Two Roads was managing 85 hotels around the world, with 35 more in the pipeline.
One of those forthcoming projects is the Thompson Hotel in The Yards, a massive mixed-use development in the Capitol Riverfront in Washington, D.C., scheduled to open in 2020. Two Roads had been named as the hotel manager for a Geolo-led, $300M residential/hospitality mixed-use project in Austin, Texas, according to the release.
Two Roads' brands occupy a tier of luxury higher than most, though not as exclusive as icons such as the Four Seasons or The Ritz-Carlton. That fits with Hyatt's strategy, which CEO Mark Hoplamazian told Bloomberg was a big reason for the acquisition, along with the fact it adds 23 markets where Hyatt had not had a presence before.
The deal is part of Hyatt's larger strategy to move away from owning real estate and broaden its interest in management. That direction is what led Hyatt to sell three major properties in a $1B transaction earlier this year.
Though John Pritzker sold his interest in Hyatt to other family members in 2010, Geolo was already and will remain the largest owner of Hyatt-managed hotels after the sale.
CORRECTION, OCT. 9, 11:45 A.M. ET: A previous version of this article misstated Lowe's company name and its relationship to the sale of Two Roads. This story and headline have been updated.