Henley, WaterWalk Enter Into $100M Agreement to Build Hotel Apartments Along East Coast

by Haisten Willis

WICHITA, KAN. — U.K.-based private equity real estate firm Henley has teamed up with WaterWalk Hotel Apartments to construct and open five WaterWalk franchises in Florida, North Carolina and New York. As part of the $100 million agreement, Henley has selected individual sites in Albany, Charlotte, Fort Lauderdale, and North Orlando, with construction starts slated for January 2016.

WaterWalk’s hybrid model of hotel and apartment combines traditional hotel services into a gated, purpose-built community, and offers amenities such as all-inclusive pricing, full-sized appliances, high-speed Internet, DirecTV, housekeeping, fitness memberships, a community bicycle program, local transportation and free breakfast.

Wichita-based WaterWalk Hotel Apartments was started by Jack DeBoer, the founder of Residence Inn, Summerfield Suites, Candlewood Suites and Value Place, and opened its first site in 2014. The deal with Henley marks the first investment in the WaterWalk franchise by a foreign investor. It also represents Henley’s first transatlantic agreement. The firm currently holds around £600 million (U.S. $923 million) in assets under management.

“WaterWalk’s versatility as a hybrid property type gives investors and franchisees an unmatched opportunity in the real estate industry by providing the strong revenue potential associated with upscale, extended-stay hotels and the capital structure and valuation of an apartment,” says David Redfern, president of WaterWalk’s real estate development and franchising groups. “According to CoStar Group, one of the biggest trends for 2015 hospitality management is foreign investment in hotel portfolios, particularly extended-stay and select-service properties.”

The deal with WaterWalk represents a milestone for Henley, which has expanded its international presence by entering the U.S. market, says Ian Rickwood, CEO at Henley. “Our investment strategy is founded upon ensuring the best possible returns for our investors. Our analysis of current demand trends in the leisure and residential markets in the States made WaterWalk a highly attractive investment opportunity,” says Rickwood.

WaterWalk’s Wichita location has already drawn corporate lodging rentals from Fortune 1000 companies, according to the company. WaterWalk will break ground this year on new locations in Louisville, Denver, Raleigh, Tulsa and San Antonio.

WaterWalk’s target customer includes business travelers, leisure travelers needing an extended-stay hotel, people moving to a new city who aren’t sure about neighborhoods but have to move immediately, interns who aren’t sure the fate of their career, parents downsizing, military families relocating, divorcees sorting out their next move and others.

Furnished units can be rented for as short as one week at a weekly rate starting at $699. The all-inclusive rate for unfurnished units starts at $999 per month for a one-bedroom apartment.

— Haisten Willis

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