MIAMI— Following its brief tenure as a part owner of the Summerfield Suites brand and six of its properties during 2005, Gencom Group, based here, developed a rather strong thirst for the upscale extended-stay segment. That thirst has now been quenched, at least partially, following the diversified hotel owner’s recent acquisition of the entire upscale extended-stay Bradford HomeSuites portfolio of properties. The portfolio acquisition, which effectively wipes the nearly five-year-old Bradford brand from the hotel landscape, involves nine hotels that Gencom and a joint venture partner paid in excess of $100 million for, according to Gencom’s principal, Karim Alibhai. While the JV partner’s identity was not confirmed by Alibhai, it appears to be Lehman Brothers Real Estate Partners considering that the JV involved in this deal was identified as the same one that acquired a 50% interest in the Summerfield Suites brand along with six of its hotels in December of 2004. In that purchase from Wyndham International, Lehman Brothers was the partner. Meanwhile, the seller in this deal was an undisclosed Netherlands-based pension fund and its Texas-based partner, Alibhai said. But shortly after Gencom and Lehman Brothers’ acquisition of the Summerfield Suites brand and assets, Summerfield’s parent, Wyndham, was sold to Blackstone Group and then Cendant Hotel Group. Subsequently, the Gencom-Lehman jv sold its brand interest and six Summerfield Suites hotels earlier this year to Hyatt Corp., which gained full control of the brand in another deal with Blackstone Group. “We had acquired the Summerfield Suites brand and assets from Wyndham in 2004 with a strategy to grow Summerfield, but we subsequently sold the brand and assets to Hyatt following Wyndham’s sale,” Alibhai explained. “But as we’ve looked at the Summerfield business model and the overall extended-stay model, we liked it as well as its returns, so we’ve wanted to expand our business in that area. So the thought here is with the majority of the Bradford assets, we can possibly convert them into Summerfield Suites, which is something we’re now exploring. We would also like to continue new development and the acquisition of extended-stay properties that we could flag with Hyatt, which brings a lot to the table with Summerfield. Plus, our previous Summerfield transaction created an extended-stay platform for us within the company. And now we’ll use that same team here for our extended-stay properties moving forward.” When asked why then did Gencom and Lehman Brothers sell its original six Summerfield Suites properties, Alibhai noted that it came down to the fact that you shouldn’t “fall in love with your real estate.” He further noted that the transaction was at the right price and had great value. “Also, given that Wyndham had just gotten sold, we weren’t sure if the Summerfield Suites brand could survive without a larger brand company behind it,” he added. “We had originally banked on Wyndham being that brand partner, but they were sold, and then when Hyatt bought Summerfield they didn’t want a brand partner.” Alibhai pointed out that the nine Bradford HomeSuites properties are all good candidates for conversion to Summerfield Suites or other upscale extended-stay brands because they are all in good condition, are in good locations and are less than five years old. The properties have also been exhibiting double-digit RevPAR growth as of late. “They could meet anyone’s upscale extended-stay criteria, including Residence Inn and Homewood Suites,” he said. Nevertheless, the portfolio will now undergo a collective $15-million renovation project. Currently, each hotel features guestrooms with living/work areas, kitchens and bedrooms; a pool; a hot tub; a 24-hour fitness center; and a business center. Four of the assets are located in Dallas; two are in Houston; one is in Austin, TX; one is in Denver; and one is in Colorado Springs, CO. For those hotels out of this bunch tha
