BOSTON? Sonesta International Hotels Corp. is on the lookout for four-star hotels in key U.S. markets that would suit its growing portfolio. A new expansion program aimed at boosting the company?s North American presence has it searching for both existing hotels and new development opportunities in U.S. markets such as Dallas, New York, Atlanta, Miami, Chicago, Denver, Phoenix and Washington, D.C., as well as Toronto, Canada. Equity created by the refinancing of two of Sonesta?s existing properties is being used to fund the aggressive growth strategy, said Allen Ostroff, who is in charge of development for Sonesta. While he would not disclose the sum set aside for expansion, Ostroff did note that the money would be used carefully, in partnership with other hotel investors to acquire or develop properties or obtain management contracts for desired assets. The new Sonesta hotels would be consistent with the company?s 23 existing properties, which largely consist of mid-size, upscale full-service hotels, said Stephanie Sonnabend, Sonesta president. Hotels currently in the Sonesta portfolio are located in: Anguilla, Aruba, Bermuda, Egypt (7), Peru (6), Tuscany (3), New Orleans (2), Boston and Miami. Ostroff is actively seeking partners on behalf of Sonesta for this U.S. expansion effort. He said that Sonesta will continue as an owner/manager in the United States and has no plans to franchise the brand in North America, as it has been done in select cities abroad. ?We are currently in talks with several other parties and are working right now on inking deals on three projects in Florida and one in Chicago,? Ostroff said. The Florida transactions include an existing hotel in South Beach Miami, that would be refurbished and repositioned. Two others in Sunny Isles, FL and Coconut Grove, FL are new-construction hotels. The property in Chicago that Sonesta is currently interested in is an historic office building that would be converted into a 400-room hotel, according to Ostroff. With strong interest in the four-star segment from many hoteliers, it may be challenging for Sonesta to obtain numerous properties within the next five years. However, executives at Sonesta are confident that there are plenty of opportunities available. ?There are enough properties out there that are four-star or can be four-star that we can convert. This segment hasn?t been overbuilt and research shows that people desire hotel stays that are pleasant and memorable. They want this type of property,? said Ostroff. A small portfolio of hotels would also be a likely acquisition candidate for Sonesta, according to Ostroff. He said he is currently in talks with the owner of a ?small portfolio of hotels that are great and we hope to get.? Capital for the growth strategy was secured through Sun America via the refinancing of two Sonesta hotels? one in Cambridge, MA, and one in Key Biscayne, FL? which were ?highly under-leveraged,? according to Sonnabend. The majority of Sonesta?s hotels thrive on a mixture of individual business travelers, small groups and leisure travelers. Each property is reflective of its locale and is more unique than a traditional chain hotel, according to the company. The brand is positioned in the upper, upscale market, competing with other full-service chains such as Loews Hotels. As many as 12 new hotels are expected to join the portfolio over the next five years, each of which are expected to cater to those core customer groups.
