Hilton intends to buy Graduate Hotels for $210 million

15.03.2024 - 12:07 / thepointsguy.com / Chris Nassetta

Hilton is set to become a leading hotel player in college towns and cities across the U.S.

The hotel giant plans to acquire Graduate Hotels — a brand that's heavily concentrated in the U.S. but also has properties in the U.K. — from owner AJ Capital. The deal is valued at $210 million.

Hilton will own the rights to the Graduate Hotels brand and be in charge of future development and growth through franchising. But, AJ Capital will retain real estate ownership of the existing Graduate portfolio of open hotels and those in development under new long-term Hilton franchise agreements.

Rumors that a takeover was in the works were first reported last month. Graduate began as a boutique hotel brand focusing on U.S. college towns like Oxford, Mississippi (home of the University of Mississippi); Athens, Georgia (home of the University of Georgia); and Ann Arbor, Michigan (home of the University of Michigan).

The company has since expanded to larger cities — albeit ones with a significant higher education presence — like Nashville, New York City and Providence.

"Adding Graduate Hotels to our portfolio of award-winning brands accelerates our expansion in the lifestyle space by pairing an existing much-loved brand with the power of Hilton's strong commercial engine to drive growth," Hilton CEO Chris Nassetta said in a prepared statement. "We have long had a high bar for adding brands to our portfolio, whether organically or through acquisition, and Graduate will be another driver of growth for us, presenting a unique opportunity to serve more guests in more sought-after destinations."

Graduate Hotels has more than 35 hotels that are either open or in development, but that figure is expected to throttle much higher: Nassetta noted the brand could eventually reach as many as 500 hotels. The acquisition is expected to close by the end of June.

Graduate will reside alongside Canopy, Tempo, Motto and the Curio and Tapestry Collections in Hilton's lifestyle brand portfolio.

"Both Hilton and Graduate Hotels are committed to delivering exceptional experiences and making a positive impact on communities," Ben Weprin, the founder of Graduate Hotels and CEO of AJ Capital, said in a prepared statement. "Our shared values and close collaboration will ensure a smooth transition while keeping the Graduate Hotels' unique brand identity intact. With Hilton's extensive network behind us, guests can anticipate even more exciting opportunities."

The brand takeover is a strategic departure for Hilton, which has largely followed a path of organically launching and growing brands while its competitors like Marriott, Hyatt and IHG acquired brands to get into spaces they hadn't previously occupied or geographic areas where they had a