Atlantic Equity Partners Targets $150M to Decarbonize Hotels

Atlantic Equity Partners, a New York-based “impact-minded” real estate private equity firm, is targeting at least $150 million for its second fund to buy and sustainably redevelop hospitality real estate.

So far, the firm has raised $25 million, with the goal of capitalizing on the current state of high interest rates and softening commercial real estate valuations to invest in hotels and other hospitality properties, in line with the firm’s first fund strategy.

These are usually real estate in highly desirable markets “under unique circumstances”, acquired at a discount before repositioning, the firm said.

The fund will seek to improve and decarbonize the properties to capitalize on what the firm describes as a growing customer desire for engaging with businesses that are concerned with sustainability.

Atlantic Equity specializes in value-add upgrades that make the assets hyper-efficient, electrified and fossil fuel independent. It said by implementing electric systems and on-site renewable energy generation, it can reduce energy costs by nearly 100% with the added benefit of tax incentives, rebates and grants.

Atlantic expects the properties to deliver high investor returns as increased demand for decarbonized real estate will lead to attractive exits.

“There will be a first mover advantage in this space for those who recognize the benefits of electrifying real estate operations. Investors who are forward-thinking about the inevitable impact of future policy change, related to carbon reduction in real estate and business operations, stand to benefit greatly,” said CEO Jonathan Hoenig.