Kronos Hotels Adding 8 Hotels, Renovating 6 Others

-- Hotels, 4/7/2008 8:49:00 AM

Atlanta-based Kronos Hotels, LLC, continues its rise as one of America’s fastest-growing independent owners and operators of upper economy brand full-service properties with the announced acquisition of eight new hotels valued at approximately $45 million. 

This will bring the company’s holdings to 36 properties in 10 states which have a combined total of about 5,000 rooms and an asset value of $250 million.

The eight new hotels include a Holiday Inn Select in Atlanta, Georgia with 245 rooms and a Holiday Inn Select in St. Louis, Missouri with 195 rooms, plus Fairfield Inn, Holiday Inn Express, and Comfort Inn & Suites properties in Kansas, Missouri and Washington State with an additional 900 rooms.

The properties in Atlanta and St. Louis are being acquired from Cooper Hotels of Memphis, Tennessee in a transaction brokered by Jones Lang Lasalle, while the remaining six properties are being acquired from a privately-owned company in a transaction brokered by PriyaCorp Investment Inc. in California.   

Closings are expected by the end of April on the transaction with Cooper Hotels and by the end of June on the other transaction.   

“We’re being operationally aggressive while staying fiscally prudent,” explained Charles Morais, chief executive officer of Kronos, which in June of last year bought 16 properties from Lodgian, Inc. 

“In today’s hospitality marketplace, there are lots of strong investment opportunities available and we’re selectively seeking out the ones that are most appropriate for our portfolio.  A deal has to make solid sense or we’ll let it sit on the shelf.” 

Morais heads an investment group that includes brothers Rajesh Mir and Sunil Mir, brothers Sunil Bhikha and Kishor Bhikha, Sarwir Hansa, and Moses Daniel.  They have assembled a group of proven hotel veterans to handle day-to-day management responsibilities. 

“We’ve been making positive things happen for our investors and our employees – and that will remain our focus in the months ahead,” added Morias, who expects to add as many as 10 additional properties within the next year in the United States, Europe, and Asia.

For example, Kronos is in the final stages of acquiring two existing hotels in Morais’ home country of Malaysia to expand its international portfolio, with closing expected by early June.  These two independently-owned hotels have a total of 160 rooms and are being acquired by Kronos Hotels and Resorts Sdn Bhd, a subsidiary which was established last year to spearhead a major presence for Kronos in Asia. 

The company is also in negotiations to acquire three additional hotels in Malaysia. 

In the meantime, the company has rolled out an extensive renovation at seven of its existing properties which includes new case goods, carpeting, and draperies in guest rooms, plus upgrades of lobby and exterior areas.  Valued at almost $10 million, the renovations are being conducted over the next six months at:

Holiday Inn in Sheffield, Alabama (202 rooms)
Holiday Inn in Lancaster, Pennsylvania (189 rooms)
Holiday Inn Greentree in Pittsburgh, Pennsylvania (201 rooms)
Holiday Inn in Lansing, Michigan (244 rooms)
Crowne Plaza in Cedar Rapids, Iowa (275 rooms)
Crowne Plaza at JFK Airport in New York City (183 rooms) 
Ramada Plaza in Macon, Georgia (297 rooms)
 
Kronos Hotels manages its properties through a subsidiary – Destination Hospitality, LLC – which has been approved by such prestigious hospitality franchise partners as Hilton Hotels, InterContinental Hotel Group, and Starwood Hotels. 

While hotels are the niche market and specialty for Kronos, the company also owns shopping centers, residential properties and other real estate in the southeastern United States.