W Hotel Bogota sold to ARC and Ithaca for $40m

ARC Partners and Ithaca Capital have joined hands to acquire the Marriott-owned luxury property at a ‘fairly good price.'

Miami’s ARC Partners has acquired W Hotel Bogota in partnership with Ithaca Capital in a deal valued at approximately $40 million, said a source close to the deal.

Conducted as a non-broker, privately negotiated deal, the opportunity to invest in W Hotels Bogota was presented to ARC Partners by “someone looking to get out of the hotel business,” the PE firm’s partner and managing member David Gordon told PE Hub.

“They weren’t looking for top dollar; they were looking for ease,” Gordon said. “[And] we are good at quick decisions.”

W Hotels, a youth-focused luxury hotel chain owned by Marriott, was “bought at a fairly good price,” Gordon added. The Bogota property acquisition is the firm’s second joint venture with Ithaca Capital. ARC first partnered with the South Florida-based PE firm in 2018 to acquire JW Marriott Panama, a high-profile hospitality property.

The deal marks ARC’s entrance into Colombia and builds on the company’s non-traditional asset portfolio.

“We see a lot of conferences coming to the Colombia market,” said Gordon.

The acquisition was announced last week in the wake of the coronavirus outbreak, which has prompted cancellations of events, festivals and conferences around the globe.

“With corona going on I’m scared about the hotel business,” said Gordon, who clarified that the outbreak should not be impactful from a long-term perspective. “I think if there are any other opportunities where I can buy a hotel for cheap, I’m all about it.”

W Hotel Bogota’s occupancy rate stands at 80 percent and ARC hopes to increase it by 10 percent, the investor told PE Hub.

ARC in general has focused on distressed mortgage businesses for more than 20 years and has invested across the United States, Panama, India, Nigeria and the Caribbean. The value of its investments exceeds $1 billion to date.

Action Item: For more information email ARC at administration@arcpe.com.