Limestone Capital continues expansion with acquisition of the Yard Hotel Milan

We are pleased to announce the acquisition of The Yard, a boutique hotel in Milan that has established itself over the last years as one of the city’s leading lifestyle hotels and renowned cocktail bars. The acquisition is our fund’s third transaction since the beginning of the pandemic and the second of its growing Italian cluster in Italy together with Aethos Saragano. The deal is part of our strategic focus to acquire and increase the performance of traditionally run hotels with strong real estate fundamentals and turn them into high yield, tech-enabled lifestyle hotels with vigorous growth. 

As with all of its investments, we will place technology and authentic hospitality at the heart of the transformation process. To achieve this, our investment fund will partner again with Aethos Hotels & Clubs to conceptualise and execute the vision and re-birth of this exciting hotel asset which has a loyal following among the fashion, music and creative industries and is a fixture in the lifestyle and cultural scene of Milan as well as internationally. Aethos specialises in innovative and modern hospitality solutions with the goal to optimize returns for owners while delivering authentic, invigorating travel experiences for today’s modern traveler. 

Together with leading family offices and institutional co-investors around the globe, we will continue to invest from our core fund Amethyst into our strong pipeline of Covid-opportunities.

“We have sourced highly attractive investment opportunities in key markets and will continue to grow in the overall Mediterranean, particularly however in Italy’s hotel real estate market, which is highly fragmented and has a lot of untapped potential,” says Limestone Capital General Partner Alexander Schütz.

“The combination of Limestone’s hands-on, vertically integrated asset management approach and a tech-enabled operating platform headed by highly experienced hoteliers and technology entrepreneurs delivers rapid value creation for our fund investors and partners,” says Limestone’s Managing Partner Benjamin Habbel.

About Limestone Capital

Limestone Capital is a fully integrated investment firm dedicated to identifying and creating value within the hospitality sector. The private firm manages capital on behalf of leading family offices and institutional investors utilising a highly selective investment approach focused on high-quality, differentiated assets with attractive risk-adjusted returns.

About Aethos Hotels & Clubs

Aethos Hotels & Clubs is a hospitality group specialising in innovative and tech-enabled hospitality solutions to optimize returns for owners by offering differentiated concepts to unlock the full potential of the asset while delighting a new generation of conscious travellers.

Limestone Capital announces acquisition of Hotel U Palazzu Serenu in Corsica

Zug, Switzerland; December 8, 2020 - Limestone Capital, a fast growing boutique hotel investment fund, has announced the acquisition of Hotel U Palazzu Serenu, a boutique luxury hotel in Corsica. The investment comes two months after the announcement of Limestone Capital’s Amethyst Fund launch in September 2020 and represents the fourth hotel acquisition for Amethyst Fund. The deal highlights the fund’s underlying thesis that turning small underperforming hotels into professionally managed, tech-enabled boutique hotels will offer highly attractive equity returns in the post-COVID luxury hospitality sector. 

As part of the deal, Limestone will make thoughtful capex investment, integrate technology to increase distribution and reduce cost, and reposition the property for an audience seeking unspoiled nature and authentic travel experiences at a premium price point. As with all of its investments, it will place the values of sustainability, wellness, and integration at the heart of the hotel experience. 

The deal forms part of Limestone’s wider investment approach. In partnership with leading family offices across the world, Limestone expects to continue to invest in underperforming hotels across a number of European destinations and utilise its integrated asset management approach to create value. Despite the overall hotel sector facing major challenges throughout the COVID-19 pandemic, boutique hotels offer the strongest opportunities in the luxury hospitality sector to outperform larger, generically branded and antiquated competitors.

With a growing portfolio of boutique hotel developments across Europe, Limestone has again targeted a location with genuine growth potential. Set at the foot of Oletta, one of the most striking villages in Corsica, the hotel boasts an authentic atmosphere and beautiful location. The hotel is integrated into the local community, complementing Limestone’s inclusionary approach and the foundation of its transformation process. 

This acquisition builds on previous investments in Italy and Portugal. Limestone’s data-driven research together with qualitative network-driven research foresees a strong recovery in boutique properties in the European Union as certain segments of tourists return to travel and spend over-proportionally to the rest of the industry.

Benjamin Habbel, Managing Partner of Limestone Capital said: “We continue to see excellent opportunities in the boutique hotel sector across Europe with double digit return potential. With recent major steps towards the full reopening of the international hospitality sector, we are confident that recovery following COVID-19 will be swift for premium assets in sought-after destinations. U Palazzu Serenu is an exceptional opportunity with the potential to deliver strong yields. It will benefit from centralised revenue management, tech-driven distribution and services, and experienced management. It helps that Corsica is one of the few undiscovered gems of Europe. We expect strong growth from arrivals from Northern Europe, Germany and the US.”

Limestone Capital Launches Fund To Capitalise On Opportunities in Real Estate and Hospitality

Zug, Switzerland; 28 September, 2020 - Limestone Capital is pleased to announce the formal launch of a fund dedicated to capitalising on opportunities in the European real estate and hospitality sector.  As a private partnership between successful real estate investors and technology entrepreneurs, Limestone Capital has developed a unique core expertise that turns the traditional hotel model on its head.

Limestone was founded by seasoned investors Alexander Schütz (CEO, C-Quadrat and Member of the Board of Directors, Deutsche Bank AG), Christian Angermayer (Apeiron Investments), and technology entrepreneurs and hospitality insiders Benjamin Habbel and Jeffrey Coe who are both leading the operations of the firm.

Limestone Capital is a joint platform between some of Europe’s most active and sophisticated family offices including the General Partner’s Alex Schütz Family Office in Vienna and Christian Angermayer’s Apeiron Investments in London, and has over 30 million in AUM.

The firm is combining two major trends in its investment thesis. On the one hand, a dramatic shift to sustainable, healthy and more intimate travel experiences - away from the big box global hotel brands, combined with a once-in-a-decade opportunity to acquire real estate at attractive real estate prices. Both of these trends have been accelerated by the ongoing Coronavirus pandemic and have fueled both demand for new products and crushed outdated, antiquated business models.

 Commenting on the launch, Limestone Capital Managing Partner and co-founder Benjamin Habbel, says:

“The unique insight to apply a fully integrated investment strategy, has allowed for projects often overseen by large institutions due to their lack of sector knowledge, whilst at the same time being too capital intense for local entrepreneurs. This way we are beginning to build a portfolio of real estate investments that promise to deliver strong risk adjusted returns through a lean asset management approach, conservative leverage and technology-enabled operations.”

Alexander Schütz, Limestone Capital General Partner (who also serves as Board Member of Deutsche Bank):, says:

“With highly attractive entry level prices, due to Covid-19 forcing distressed asset sales, and operating assets generating cashflow quickly delivering liquidity for investors, we are confident that we have launched a firm with a highly attractive and sustainable portfolio of investments. Moreover, we believe our investors will benefit from first-class implementation from our team of real estate and technology specialists, working with excellent hand-picked management teams.” 

To date, the firm has made the following investments:

• Aethos Hotels, which positioned itself with the new generation of environmentally conscious luxury travellers, is led by a team of passionate hoteliers and technology executives that is focused on a lean and profit oriented management approach.

• Acquired three assets in Portugal to date, one of which is a city centre hotel asset that is being converted into Lisbon’s premier Luxury hotel and another one is a luxury Surf Hotel along the famous Silver Cost - less than an hour away from Lisbon.

• Limestone also acquired at the height of the Corona Crisis an italian village-hotel, called “Locanda del Prete” in Saragano, Umbria. During the crisis it used the lockdown to reimagine and renovate the property and brought it back to life in August under the Aethos banner.

Limestone has sourced a pipeline of highly attractive investment opportunities in key markets, where the firm’s data-driven research, together with qualitative network-driven research, foresees a strong recovery as certain segments of tourists return to travel and spend over-proportionally to the rest of the industry. Examples include a historic landmark hotel in Rome, or a seaside asset in Mallorca, among others.

The Great Acceleration - how the pandemic is driving a paradigm shift long overdue

The crisis has been so severe, the mindset of the traveller will be altered for a long time. The idea that things will return to normal is a narrative mirage, and that realization slowly settles in at the highest levels. At Limestone Capital, a private partnership founded by four passionate entrepreneurs in 2018, we prepare for the future, one that comes with new opportunities and challenges. Many of the articles in today's panic-porn and oversimplified news cycles, actually touch on trends that have been building for a long time. The crisis is acting as an accelerator, a disruptor - and makes it harder for legacy business models to be sustained. Below, we share some thoughts on the accelerating trends we’re observing right now, and the lessons we take away from it.

Entire industries are adapting to a post crisis world

The changing nature of work, is something anyone working in the world of technology has experienced first hand. Video calls, Slack, already made the desk a second priority. However, because of a forced mass adoption of these technologies, we will likely see a deterioration of demand in inner city commercial real estate as office space. Many CEOs consider to rent up to 30% less space in the future. Large office floor plans without much privacy, which have been in decline before the crisis already, become completely unappealing. This will depress not just inner city office space, coworking spaces and others, but commercial real estate demand as a whole. 

Retail has been hit hardest, and the mega trend of retail moving online has been dramatically accelerated through the crisis. This should not come at any surprise, but the speed of change has been brutal for investors and owners. We went from years to weeks.

Businesses that run on thin margins, and are highly cashflow dependent such as Restaurants and Cafes, Gyms and Concert halls, will come out of this period severely damaged, either indebted or not able to return to business at all. Some of the most coveted institutions of our era such Eleven Madison Park in NYC are questioning if they should reopen to begin with. Who would’ve thought just weeks ago?

We might even see demand for residential housing in crowded inner cities falling, as people could consider a place further away from work, just to be able to have some outdoor space and take more advantage of digital collaboration in the future. Who wants to be locked into a city apartment for 2 months ever again? The rediscovery of the metropolitan periphery, nature and the great outdoors in exchange for the overcrowded city centre was well underway for many working remote jobs.

Any business will have to observe these trends closely and learn from them, adjust swiftly and find opportunities in the post crisis world to thrive.

What does this all mean for the hospitality industry?

As we have seen after crises such as 9/11 or 2008 - even extraordinary events with a significant impact on travel don’t stop the long term demand for traveling abroad. After the last three major travel crises, took between 14-21 months to reach pre-event RevPar growth rates again.

Report by BCG: Breaking Ground on a New Era in Lodging

The changes to the comfort of travel after 9/11 were significant - long security lines, detailed checks, early arrival times at airports, to name the obvious, and still, the industry bounced back stronger over time. This time, there will also be new considerations that will impact travel for a long time, if not ever:

• Cleanliness & health will become one of the leading factors to make a choice in accommodation. Does the hotel have a health or hygiene manifest?

• Accessibility and “exit scenarios” might become a strong consideration. Travellers will consider how easy a potential return to home will be - to avoid a scenario being stranded on the other side of the globe like so many have just experienced.

• The already existing mega trend in healthy lifestyle, conscious travel, and the emergence of the experience travel movement will result in a high demand for hotels that shelter the guest from the hustle of the crowded city.

• Clubs and Social hubs will increase in relevance as more people work from home, and seek common spaces to interact with their peers as an alternative to the traditional office. 

• Back to nature: Venues and locations that offer green spaces and nature experiences will be even more in demand as people seek alternatives to the crowded artificial city landscapes. 

• Local escapes, within driving distance, will be among the first to rebound and enjoy a sustained revival in direct comparison to long haul travel, which might take up to 3 years to fully revolver, following this recent BCG report.

All of the above strengthen our beliefs in the re-emergence of the hospitality industry in a new formation, with new winners and losers - a process already ongoing for a while - but now accelerated. Large hotels, with long check in lines, impersonal disinfection-stations, and lots of personnel wearing PPE - will become ever less appealing to the modern traveller.

Boutique hotels that can offer a more personalised experience, away from the crowds, will be winning and taking share from large hotels that are dependent on tour operators. New lodging & experience concepts, that take into consideration the desires and concerns of tomorrow's traveller, will be taking market share from legacy players that will struggle with their re-opening positioning. Again, all of the above were trends already underway for niche audiences, however they will become more and more mainstream moving forward.

Entrepreneurial investors will make the most of it.

Investors able to identify the cracks in the market and invest at discounted valuation, will be the big winners in the growth cycle that lies ahead of us. Risk takers, that can see beyond the panic machine of the media, and make long term investments for a new travel reality, will be outperforming the mainstream.

Here at Limestone, we have the mission to invest in sustainable luxury real estate that caters to the modern, conscious traveller of the future. We create homes for the urban, creative crowd, as well as leisure and business travellers coming to town or a unique destination to seek a sanctuary. We recently acquired a unique asset in central Lisbon that stands apart from the traditional city boutique hotels, with gated, lush oasis-like gardens that offer privacy for members & guests. Still this year we will open our first hotel in Italy, a remote but easily reachable suite-only destination outside of Rome. We strongly believe in destinations that are boutique in size, offering guests to retreat and disconnect.

As an industry, we will come out of this stronger than before, as the change of the guards is now drastically accelerated. While this process is painful for everyone as a whole, it’s also an exciting fresh start and a monumental opportunity for entrepreneurial private equity investors and entrepreneurs carrying out a new vision and being well prepared for a new paradigm in lodging, real estate and consumer behaviour.

Limestone acquires first asset in Italy

This week we closed our 4th hotel transaction in 18 months. We acquired 'Locanda del Prete' in Umbria (Italy) in an off-market transaction. This deal is a prime example of Limestone's sweet spot of an underperforming/distressed hotel asset in need of tech-powered distribution and a fresh, differentiated hospitality concept. And of course, it's absolutely authentic & unique: A historic village, turned with much care into a luxury country retreat.

Now, we are deploying our technology, design & operations teams to deliver value, fast for our LPs:
 - Invest highly focused CapEx for a light refurb, by our in-house interior architecture team
- Launch property on our proprietary technology architecture, incl Cloud PMS, Rev. Mgmt, CRM
- Utilise our global distribution network, incl. our partner Group Barriere to jump-start sales
- Bring onboard our experienced hospitality leadership team to train staff, and build out team
- Re-launch restaurant with a fresh concept, developed by in-house F&B team
- Offer wide range of experiences, with strong focus on authentic learning activities & well being
- among many other...

We will re-open and turn around the hotel in the next 90 days, and expect to create significant value for our investors in a very short period of time, as well as creating the foundation for a sustainably profitable hotel operation.

As always, thank you to our amazing group of partners, as well as the team on the ground that made this happen.

Benjamin Habbel, Founder & CEO Limestone Capital

PS: I hope to see you soon enjoying a drink with us on the terrific terrace at Locanda del Prete.

CEO Magazine Interview

Our CEO Benjamin Habbel was interviewed by CEO Magazine about Limestone Capital and our investment strategy and differentiation in a competitive real estate & hospitality industry.

Ritossa Family Office Investment Summit, Dubai

Sir Anthony Ritossa welcomed the presence of 600+ global leading family offices and HNWIs in Dubai for his 10th FO Investment Summit. Delegates gathered to discuss key topics around challenges and opportunities that family offices face, such as succession planning, philanthropy, governance, and reviewed a wide range of investment opportunities together.

We participated both days of the event and connected with a wide range of investors, companies and of course some of our friends from the region. Our CEO, Benjamin spoke on a panel on “Co-Investment Opportunities” for FOs, where to find them, review them without sector expertise, and how to best structure deals with co-investors. We reviewed a few opportunities in European hotel real estate together, and discussed benefits and challenges of such co-investments in a diversified portfolio.

Benjamin was also invited to sit down with CEO Magazine, and present our highly differentiated investment thesis, that focuses on a fully integrated value chain in hospitality real estate in Europe. The interview will be featured in their next edition.

The gathering, held at the Four Seasons Dubai, was an excellent way to re-connect with industry friends and get an update on the most pressing issues and opportunities of families and managers in the region. We look forward to next year’s edition.