Acore Capital Backs Graduate Hotels as Pandemic Doom Lifts

Acore Capital is wagering on a post-pandemic recovery by making a preferred-equity investment of around $200 million in Graduate Hotels, a lodging brand focused on serving college campuses, according to people with knowledge of the matter.

The value of the company’s real estate assets exceeds $2.1 billion, one of the people said.

Graduate Hotels has 32 locations in the U.S. and the U.K., with another two opening soon, according to its website. The boutique properties cater to prospective students, returning alumni and other campus visitors.

AJ Capital Partners founded Graduate Hotels in 2014. It tapped Newmark for advice as it sought a strategic partner to supply growth capital and pay down debt, Bloomberg News reported in February.

An Acore representative declined to comment and AJ Capital didn’t immediately respond to a request for comment.

Acore in February raised $1 billion to make investments in North American hotels and said at the time it would focus on senior loans, mezzanine debt and preferred equity.

Last year was the worst on record for the U.S. hospitality industry, with occupancy rates at 42%, according to lodging data firm STR. Room demand was better than expected in the first three months of 2021, leading STR to upgrade its forecast for a lodging recovery.

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