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AJ Capital Seeks $300 Million to Expand, Pay Debt on Hotels

The company is seeking the capital in combination of debt and equity.

(Bloomberg)—AJ Capital Partners is seeking a strategic partner to supply growth capital and pay down property level debt for Graduate Hotels, a lodging brand focused on serving college campuses.

AJ Capital is seeking as much as $300 million in a combination of debt and equity, according to people familiar with the matter. The firm has retained Newmark to advise on the fundraising, said one of the people, who asked not to be named because the matter is private.

Both AJ Capital and a representative for Newmark declined to comment.

Graduate Hotels has 35 locations in the U.S. and the U.K., representing $1.9 billion in real estate assets, one of the people said. The boutique properties cater to prospective students, returning alumni and other campus visitors seeking an alternative to cookie-cutter lodging brands.

The fundraising effort comes amid the worst downturn in the history of the modern hotel industry. U.S. occupancy rates hit a record low in 2020, as the pandemic grounded flights, canceled vacations and caused many colleges to send students home to learn remotely.

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