King & Grove scores $75M investment from Conn. firm

Boutique hotel brand recently ended partnership with the Chetrit Group

New York /
Sep.September 06, 2013 03:29 PM

King & Grove Hotels has landed a new round of equity financing from Greenwich, Conn.-based investment firm Wheelock Street Capital, following the boutique hotel chain’s split from the Chetrit Group, The Real Deal has learned.

Wheelock will provide a $75 million infusion to jumpstart an expansion of the King & Grove brand, sources familiar with the investors said, marking its first investment in a New York City hotel. Timothy Hodes, a vice president at Wheelock, confirmed that the company was providing the equity but declined to comment on the dollar amount.

King & Grove, led by former Morgans Hotel Group chief Ed Scheetz, broke away from brothers Joseph and Meyer Chetrit last month after years of tenant legal battles delayed their joint conversion of the historic Hotel Chelsea.

Following the breakup, King & Grove will continue to manage the King & Grove New York, King & Grove Lafayette and the Hotel Chelsea in Manhattan; King & Grove Williamsburg in Brooklyn; and Ruschmeyers in Montauk, as The Real Deal previously reported.

The Chetrit Group will run the remaining portfolio, with King & Grove managing the Tides in Miami on its behalf.

The Hotel Chelsea, also partly owned by David Bistricer’s Clipper Equity, had been a fountain of contention between the rent-stabilized tenants at the landmarked property and their new landlords, which bought the building for $79 million in 2011. Construction halted in March when the Department of Buildings issued a stop work order against the developers.

Wheelock, founded in 2008 by veterans of Starwood Capital and Westbrook Partners — Merrick “Rick” Kleeman and Jonathan Paul — has been actively investing in hotels in recent months.

In September 2012, the firm said it would join Hilton and Marriott to buy a 12-building portfolio of hotels, mostly in Texas and the southeastern U.S., from Inland American Real Estate Trust for $116 million. That same month, Wheelock announced its $105 million purchase of three full-service hotels from Sunstone Hotel Investors. The properties include the San Diego Hilton Del Mar, the Minneapolis DoubleTree Guest Suites and the Detroit Marriott Troy.

Also in 2012, Wheelock closed on a $525 million fund made up of pension funds, endowments to foundations and other asset classes.

Neither representatives for Scheetz nor the Chetrit Group were immediately available for comment.


Related Articles

arrow_forward_ios
315 West 35th Street with Isaac Chetrit and DJ Dashti (Google Maps, Linkedin, iStock)
Chetrit to open flex-office location near Penn Station
Chetrit to open flex-office location near Penn Station
261 Madison Avenue and 205 East 42nd Street are among the closed locations. (Sapir, Durst, WeWork)
WeWork dumps several Manhattan locations
WeWork dumps several Manhattan locations
Chelsea Hotel with Ira Drukier and Richard Born (Getty)
Chelsea Hotel reno can resume after housing department drops fight
Chelsea Hotel reno can resume after housing department drops fight
From left:  Joseph Chetrit, 404 Fifth Avenue and WeWork CEO Sandeep Mathrani (Photos via Wikipedia Commons; Google Maps)
WeWork battles Chetrit Group over Midtown lease
WeWork battles Chetrit Group over Midtown lease
Joseph Chetrit and 49 Chambers (Getty, 49 Chambers)
Chetrit lands $90M inventory loans for Tribeca condo conversion
Chetrit lands $90M inventory loans for Tribeca condo conversion
Sharif El-Gamal, Joseph Chetrit and 1384 Broadway (Getty; Google Maps)
Chetrit Group sues Sharif El-Gamal for unpaid rent
Chetrit Group sues Sharif El-Gamal for unpaid rent
2870 Ocean Avenue and Isaac Chetrit, and 936 Home Street (Google Maps) 
Chetrit family’s dev site buy tops weekly mid-market sales
Chetrit family’s dev site buy tops weekly mid-market sales
Chetrit Group principal Michael Chetrit and 850 Third Avenue (850thirdavenue, iStock, Discovery Channel)
Chetrit battles Discovery Channel at 850 3rd Avenue
Chetrit battles Discovery Channel at 850 3rd Avenue
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...