Ace Hotel Brand To Be Sold For $85M To Expansion-Minded Buyer
Boutique hotel chain Ace Group International has agreed to be sold to an Oregon-based hospitality firm for $85M.
Portland, Oregon-based Sortis Holdings has agreed to pay cash to the owners of the brand that operates 11 locations, including in New York, Los Angeles, Seattle and Kyoto, Japan, The Wall Street Journal reports. The brand largely operates with management contracts on properties, and this acquisition deal includes just one lease, for its Seattle location, per the publication.
Sortis plans to build new Ace-branded hotels — which includes the luxury hotel Maison de la Luz in New Orleans — and purchase the properties that are using its flag to operate. Sortis is aiming to grow its hotel portfolio holdings to 30, with most of those set to be Ace hotels.
Sortis Holdings Executive Chairman Paul Brenneke said Ace, which has live DJs and other new-age amenities, has "carved out a unique niche" and customer base.He expects to expand it beyond downtown areas and into resorts and luxury camping properties over the next few years.
“There’s going to be a lot of turnover in the hotel world,” Brenneke told the WSJ. “When turnover happens it creates the opportunity for a new brand to come in.”
The first Ace hotel opened 24 years ago in Seattle. The company was co-founded by Alex Calderwood, who died in 2013. Its clientele has largely been younger, leisure travelers and has relied less on the pandemic-battered business travel market.
Sortis has traditionally operated as a fund management business, raising a qualified opportunity zone fund and operating a nontraded real estate investment trust, for example. But at the end of 2021, the company sold off its fund management business to former Sortis executives and refocused on growing hospitality brands. It closed on three acquisitions just before 2022: the operator of the Oregon-based Bamboo Sushi chain, Rudy's Barbershops and Current Co, a hotel developer.