New York City-based Brookfield Asset Management has acquired the Generator Hostels’ European brand and hotels for a price of €776 million ($869 million).
The seller is London-based Queensgate Investments, which bought Generator in 2017 for approximately €450 million ($504 million) from Patron Capital in a deal that was seen as the first major acquisition and investment in the hostel niche.
The European Generator properties have a combined 2,800 rooms in Amsterdam, Berlin, Barcelona, Copenhagen, Dublin, Hamburg, London, Madrid, Paris, Rome, Stockholm and Venice.
There is no indication if branding will change.
Queensgate remains the owner of Generator’s two hotels in the U.S., which are in Miami and Washington, D.C.
Within the hotel real-estate asset class in Europe, Brookfield also has investment in Center Parcs, Edyn, Experimental Group and Selenta Group.
Across all asset classes, it has approximately €50 billion ($56 billion) of ownership in Europe.
Lauren Okada Young, managing director, real estate, said of the 15-hotel deal that Brookfield has seen “significant opportunity to further scale and enhance the business, drawing on our deep sector expertise.”
Brookfield plans to accelerate Generator's growth through acquisitions and by striking third-party management agreements in the hostel space, according to a news release about the deal.
About Generator
When Queensgate acquired Generator in 2017, it had 12 operational hotels and two in the pipeline with a total bed count of 8,639.
The brand’s hotels offer a combination of dormitory-style rooms along with a few standalone rooms, establishing it as a hostel/hotel hybrid, located largely in city centers. The company bills itself as "affordable luxury and masters of the social experience." Properties have communal bars, cafes and relaxation areas, and they incorporate fun design elements and encourage socialization.
When Queensgate bought the brand, it planned a €300 million investment into growing Generator's footprint.
In November 2023, Queensgate refinanced the European assets to the tune of €750 million, at the time the equivalent of $802 million, which it said would “permit the brand to expand.”
Following this refinancing, Generator’s former CEO Alastair Thomann told CoStar News Hotels that the firm’s strategy was to grow via third-party management agreements.
He added, “we will enter the Asia-Pacific market soon, not only via the acquisition of single assets but perhaps with smaller brands in our space. We are also starting to win hotel management agreements.”
The recent opening of the Generator Berlin Alexanderplatz was one such deal, the rebranding of the ONE80° Hostel.
Berlin is the only European city in which Generator has more than one asset — in its case, three.
Queensgate added at the time that the “group has quadrupled profits in the six years since Queensgate [acquired Generator].”
Queensgate acquired Generator’s sibling brand Freehand Hotels in 2019 from a consortium including The Yucaipa Companies and Sydell Group. That brand has four hotels with approximately 1,000 rooms in Chicago, Los Angeles, Miami and New York City.
Requests for comment from both Brookfield and Queensgate had not been returned at press time.