Ace Hotel Chain Acquired for $85 Million by Hospitality Firm Sortis: Analysis

25.08.2023 - 14:18 / skift.com / Sean Oneill / Ace Hotel

Ace Group International, the operator of a buzzy brand of 11 open Ace lifestyle hotels, will be acquired by Sortis Holdings, a Portland, Oregon-based hospitality firm, the companies said on Tuesday.

Sortis paid $85 million in cash for Ace Group, owner of the Ace brand, the luxury Maison de la Luz brand (with one property open), the minimalist lodging brand Sister City (which was temporarily open and could be brought back), and the management company, Atelier Ace.

Sortis’ Kelly Sawdon led the acquisition. Before she joined Sortis in 2021, Sawdon was a partner at the Ace Hotel Group and had been a key player in the brand since shortly after its creation by three friends (Doug Herrick, Alex Calderwood, and Wade Weigel) in 1999 in Seattle.

Sortis got to know the Ace founders during the pandemic crunch. In 2021, it became a co-owner of the downtown Portland Ace Hotel in Washington state. As a joint owner along with Ace executives, it helped to fund the company’s refurbishment during the aftermath of the coronavirus hit to travel.

The combined entity Ace and Sortis organizations will have 15 hotels under management. Sortis manages, and is half-owner of, the Mayflower Park Hotel in Seattle.

Sortis plans to roughly double the number of Ace hotels worldwide over several years, it told the Wall Street Journal, which broke the story.

Sortis has been scaling up a set of lifestyle businesses. It has stakes in a handful of restaurants, coffee shops, the Rudy’s Barbershop chain (co-founded by a co-founder of Ace), and the Bamboo Sushi restaurant chain. It takes hospitality brands and provides capital access, real estate growth strategies, co-location opportunities, and a digital team for data analytics and e-commerce.

Combining Ace’s hotel offerings with other lifestyle and cultural offerings appears to be the goal, or what Sortis called “spirited cultural hubs” that embrace locals and out-of-towners and may be located at resorts and luxury camping properties as well as in cities. For example, Sortis recently bought a 2,400-acre area for resort development near Bend, Oregon.

Giant conglomerates have bought lifestyle brands but sometimes have struggled to keep the brands’ innovation and buzz. People debate whether the W and Kimpton brands, for instance, have the same vigor as they did before they were acquired respectively by Marriott International and International Hotels Group (IHG).

The small size of Sortis and its experience with food-and-beverage brands, which is a key component of lifestyle hotels, may help Ace’s brand to thrive as it scales up in size.

Almost everything will come down to the chemistry between the new owner and capital provider and the management team.

“The Sortis platform is rooted in