Ace Hotel Brand sold to hotel company for $85 million
A Portland-based hotel company now has a trick up its sleeve after taking over the hotel group behind a fashionable chain.
Sortis Holdings acquires operator Ace Group Internationa for $85 million in all-cash deal, according to The Wall Street Journal reported. The agreement covers the brand and the hotel management company.
Ace Hotels’ portfolio includes nearly a dozen hotels around the world, including properties in New York, Los Angeles and Kyoto. Sortis, an experienced hotel investor, hopes to more than double its hotel portfolio to 30, largely made up of Ace-branded properties.
“There’s going to be a lot of turnover in the hospitality industry,” Paul Brenneke, chairman of Sortis, told the Journal. “When turnover happens, it creates the opportunity for a new brand to come in.”
In addition to building Ace hotels, Sortis also plans to acquire existing properties that can be integrated into the Ace brand. The company has largely focused on asset management contracts.
The company’s previous attempt to grow by partnering with a developer had its own potential obstacles. David Paz’s Omnia group is involved in litigation with his former management partner on a long quest to redevelop a flophouse at 225 Bowery Street into a niche hotel on the Lower East Side. The property issue was taken to court after Omnia missed payments despite agreements to operate as a temporary homeless shelter and individual listings on Airbnb.
Ace Hotels cater to younger guests and leisure travelers, relying less on business travelers who have often gone missing since the pandemic began. Brenneke said he’s ready to push Ace down new avenues, with plans for luxury resorts and campsites away from the brand’s traditional downtown locations.
The hotel chain may well target a niche clientele, but it has not been spared by the slowdown in the hotel industry caused by the pandemic. A year ago, the Ace Hotel Chicago in that city’s Fulton Market neighborhood closed its doors for good. Properties in Pittsburgh and London too permanently closed during the pandemic.
Ace opened its first location in 1999 in Seattle. The company was co-founded by Alex Calderwood, who died in 2013.