Tribeca Associates Launching  $500M Hotel Investment Fund

Mark Gordon, managing partner of Tribeca Associates, is out to raise roughly $500 million in debt and equity for a new venture. The fund, named Intrinsic Hotel Capital, will be focused on hotels. As reported by the Real Deal, Gordon is partnering with Joe Vassallo of Brooklyn, the former Managing director at Deutsche Bank and Natixis. The newly launched investment fund aims to purchase approximately 10 hotels in the country over the next two years. They will be open to consider both select-service and full-service hotels. He sees prospect in existing hotels which may stand to earn more with few minor improvements. “It’s really an asset-specific hotel strategy,” Gordon said. “I’ve found that there are good opportunities in bad markets and bad opportunities in good markets.”

The timing might be just right to steal a deal. NY’s hotel revenues have been suffering due to an excess in supply of rooms, and rising expenditures. Nightly Rates have been falling, particularly in the city’s select-service low price hotels. Futhermore, throughout the U.S., hotels are facing serious competition from Airbnb, which rents out apartments for the short term online, and is backed by over $3 billion in venture capital.

“We see opportunity in acquiring existing, income-producing hotels that are already performing well but where we can effectuate enhanced cash flow …. through a combination of change of management, brand, physical improvements, creative food and beverage concepts and the like,” Gordon said. “The acquisition strategy is all about minimizing risk while generating core-plus returns.”

Mr. Gordon has extensive experience in hotels. Prior to co-launching Tribeca Associates in 2010, he was Managing Partner at Sonnenblick-Goldman, heading Cushman & Wakefield’s hotel group. The company developed the Baccarat Hotel and Residence at 20 West 53rd Street, which it completed along with Starwood Capital Group. Upon sale of the hotel in 2015, they set a new record price for a U.S. hotel at the time, selling for $230 million, or $2.1 million per key. Gordon also represented hotel owners around the country and completed about $20 billion in transactions. He served as an advisor on many of New York’s most noteworthy hotel transactions including; the Essex House, the Paramount, W Times Square, the Delmonico, the Dream, the Benjamin, Hudson, the Empire, the Chatwal and the Surrey Hotels.

Mr. Gordon remains active with Tribeca Associates’ four ongoing projects, which include the renovation of two office buildings at 30 Broad Street and 130 West 42nd Street.

By: Ilana Siyance


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