Warning: getimagesize(): Filename cannot be empty in /home/blackenterprise/public_html/wp-content/themes/blackenterprise/single-standard.php on line 35
No one understands the importance of ownership more than the managers of RLJ Urban Lodging Funds. Since its formation in 2004, the private equity fund has aggressively acquired 17 hotels from California to Massachusetts and expected to close on three more properties by the end of 2005.
Chaired by Black Entertainment Television founder Robert L. Johnson and backed by a diverse group of investors, RLJ Funds has become one of the top black equity funds with $600 million in assets and $900 million in purchasing power.
“RLJ’s African American ownership model to create, find, and acquire hotels is one that is envied,” says Andy Ingraham, president of the National Association of Black Hotel Owners, Operators & Developers. “RLJ created a fund that’s unique in that this is the first time African Americans did it and were successful.”
In recent months, the Bethesda, Maryland-based fund, which focuses on Hilton and Marriott properties, has acquired two residence Inn by Marriott hotels, one in Cambridge, Massachusetts, and the other in Poughkeepsie, New York.
“With RLJ you have had an explosion. They’ve set a new trend of African American ownership and now you have other companies saying, ‘We want to own,'” Ingraham says. “Because of the success of the Urban Lodging Fund, you will see additional funds created by African Americans.”
Brian Parker, vice president of emerging markets and new business development at Choice Hotels, says RLJ Funds brings instant credibility to hotel ownership as an entrepreneurial venture for blacks. Less than 1% of the hotels in the U.S. are owned by African Americans. “Many entrepreneurs can visualize themselves owning hotels; but not everyone has access to the capital. You have to look at RLJ’s model and then adapt it to your own financial capabilities.”
RLJ Funds is an affiliate of RLJ Development L.L.C., which is ranked No. 40 on the BE INDUSTRIAL/SERVICE 100 list with $92.2 million in sales.
President Thomas J. Baltimore Jr. says that while the company is focused on raising and adding funds, it eventually hopes to expand product lines by purchasing offices and multifamily properties.