This boutique hotel was purchased at attractive valuations because the previous owner could not service their debt obligations thus resulting to a forced seller scenario.
Through our networks in Japan, we managed to negotiate with the seller’s financing bank directly and managed to negotiate and purchase the asset at below its replacement cost and close to double digits normalized cash flow yields.
Furthermore, Pegasus acquired the asset at over a 50% discount to the previous transacted value 3 years ago and below the previous mortgage loan amount thus providing us with an ample margin of safety for this investment opportunity.
Much like our March acquisition, we will appoint a new tech-enabled hotel operator, Wayfarer 株式会社 (https://www.wayfarer-hotels.com) to operate, stabilize and turnaround the hotel.
Located within 10 minutes’ walk and 5 minutes driving distance between our March acquisition, we expect that there will be direct operating synergies between these 2 hotels.
