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SCP Hospitality Plans $200M+ in Hotel Investments

Soul Community Planet, a hospitality company launched in 2018 by former Sunstone Hotel Investors executive Ken Cruse, is in expansion mode with plans to invest north of $200 million in hotel deals and opportunities via a new investment fund.

The company was initially launched as an offshoot of San Clemente-based Alpha Wave Investors in 2018, with SCP offering hospitality branding and management to Alpha Wave properties.

SCP has now formed SCP Hospitality, a San Juan Capistrano-based entity that plans on becoming its own hotel owner, with SCP overseeing branding and management of future acquisitions.

Now, SCP will acquire and manage its own portfolio, with the goal of capitalizing on distressed properties hit by the coronavirus pandemic.

“The hospitality industry is currently enduring unprecedented distress, which, while painful, is opening new windows for innovation and providing growth opportunities for new offerings that are aligned with the priorities of modern consumers,” Chief Executive Cruse said in a statement.

The investment fund closed at the end of 2020; Stifel, Nicolaus & Co. is acting as financial advisor to Soul Community Planet.

The company still plans on operating as a “holistic hospitality” brand that focuses on eco-friendly amenities and wellness components at hospitality venues like hotels, coworking spaces, fitness facilities and restaurants.

“As society reassesses our priorities, conscious travelers are seeking out venues that are better aligned with their own core values. As a result, many are finding SCP to be a highly appealing alternative to more traditional hospitality offerings,” Cruse said.

The new investment “coupled with prudent levels of property-level debt gives SCP upwards of $500 million of capacity to grow its holistic hospitality brand through hotel acquisitions and partnerships,” the company said in a recent statement.

“The enhanced financial resources we now have at our disposal put us in a strong position to bring SCP to a broad range of new markets and serve a deeper pool of conscious consumers desiring to make positive choices for themselves, their communities and the planet,” Cruse added.

Market Opportunity

Cruse, a former chief executive of Sunstone (NYSE: SHO), left the REIT in 2015 to form Alpha Wave along with principals David Sloan, Lindsay Monge and Jordan Fisher.

SCP opened its first location in 2018 with SCP Colorado Springs. In the next two years, it opened SCP Redmond and SCP Depoe Bay. An investor in the Redmond, Ore. location is Newport Beach’s RevOz Capital, a real estate firm focused on opportunity zone investments whose executive team includes Lisa Bhathal Merage and Alex Bhathal.

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