SHERIDAN, WYOMING – Feb. 26, 2025 – Trinity Investments, a renowned private real estate investment firm, continues to solidify its position as a leader in the luxury hotel sector, focusing on strategic acquisitions and value-add opportunities. With a clear-minded approach, Trinity's investment ethos is paying off, as evidenced by recent high-profile deals.
Market Dynamics and Strategic Focus
Sean Hehir, the CEO of Trinity Investments, observes a "Dickensian notion of the hotel industry: a tale of two segments, where strong performance in one is offset by tepid performance in the other." This perspective is supported by STR forecasts, which predict robust RevPAR growth in the higher-end chain scales, particularly in the luxury and upper-upscale segments. Specifically, STR expects RevPAR in the luxury segment to increase 2.9% in 2025, 2.2% in 2026, and 2.5% in 2027. Conversely, the midscale segment is forecasted to contract, with a 0.7% decrease in RevPAR in 2025, and the economy segment is expected to remain flattish through 2027.
Trinity Investments strategically focuses on upper-upscale and luxury hotels in resort and urban markets, aligning with these favorable market projections. This targeted approach has led to significant acquisitions, including the 266-room Standard, London, in November 2024, and the 450-room Fairmont Olympic Hotel, Seattle, in December 2024. These deals followed the substantial acquisition of the 1,000-room Diplomat Beach Resort in Hollywood, Fla., in 2023.
Value-Add Investment Ethos
“We focus on under-renovated, under-asset-managed and under-appreciated assets,” Hehir said. “We are true value-add investors and, as such, need to be able to find opportunities at any point in a cycle.” This philosophy drives Trinity's approach to identifying and capitalizing on undervalued properties.
The acquisition of the Diplomat Beach Resort exemplifies this strategy. Trinity and partner Credit Suisse Asset Management acquired the hotel from Brookfield for a reported $835 million, despite a $90-million renovation in 2018. The hotel is currently operating within Hilton’s Curio Collection and will be reflagged under the Hilton Signia brand after further renovations and repositioning. “Where can you find 10 acres of land on the Atlantic in South Florida with a 1,000-room hotel?” Hehir mused. “It is the epitome of irreplaceable real estate. That stuff is not getting built anymore.”
Similarly, the acquisition of the Fairmont Olympic Hotel in Seattle received a boost from Amazon’s mandate for employees to return to the office five days a week. “It was a real ‘aha!’ moment for us,” Hehir said. The Standard, London, is also expected to see increased returns following Hyatt Hotels Corp.’s acquisition of Standard International. “It suddenly changed the profile of corporate travelers wanting to book there because they could earn points,” Hehir said.
Strategic Acquisition and Disposal
Trinity Investments exclusively buys and sells assets, emphasizing a comprehensive approach that considers both acquisition and disposal. “Who is this going to appeal to down the line?” Hehir said, highlighting the importance of anticipating future buyer interest. This long-term perspective allows Trinity to maximize returns on its investments.
The company follows a structured four-year plan: the first year focuses on planning renovations and repositioning, the second on implementation, the third on stabilizing the asset, and the fourth on potential exit. “That’s when we start to look to potentially exit,” Hehir said. “You don’t want to run into things without having the proper work done up front.” For example, the 2022 acquisition of Four Seasons Dallas at Los Colinas, repositioned as The Ritz-Carlton Dallas, Las Colinas, is now being considered for potential sale to a REIT or another strategic buyer.
Navigating Market Challenges
Despite market fluctuations, Trinity Investments maintains a strong position. “We typically trade around a 7% cap rate, so can absorb 8% interest rates,” Hehir said, noting the advantage of their portfolio in high-barrier-to-entry markets. The company has also successfully navigated debt markets, executing close to $3.5 billion in financing or refis over the past 18 months.
Hehir attributes Trinity’s success to a combination of strategic planning and market insight. “It’s very hard to get the approvals and the entitlements,” he said, addressing the challenges of new construction. The company’s focus on existing assets in prime locations mitigates these risks.
Leadership and Vision
Sean Hehir’s journey in the hospitality industry began with his father’s advice. “He looked at me, and said, ‘Sean, you like people, you like travel and you like business.’ That was the catalyst.” After graduating from Cornell’s hospitality school, Hehir has steered more than $8 billion in investment during his 25-plus-year tenure with Trinity.
Trinity Investments remains committed to its focused approach, exclusively investing in hospitality assets. “It’s a nuanced asset class,” Hehir said, emphasizing the importance of asset and project management. With a portfolio of 15 full-service hotels and resorts, Trinity continues to deliver consistent results, demonstrating its ability to thrive in the dynamic hotel market.
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