Funky Boutique Operator Ace Hotel Reaches Deal to Sell the Company

“The brand’s just done an incredible job over the years of building a very loyal customer base and really a strong community,” Mr. Brenneke said. “It’s really carved out a unique niche.”

Ace currently has 11 hotels in operation, including Los Angeles, New York, Kyoto, Japan, and one in New Orleans under its new luxury brand, Maison de la Luz.

Sortis, which invests in and acquires hospitality brands ranging from sushi chains and coffee shops to hotels and barbers, said it plans to more than double the number of hotels in its portfolio to 30, the majority of which will be Ace Hotels. The new owner plans to expand in the U.S. and internationally and push the brand beyond its traditional urban milieu. 

City hotels have been the slowest to recover from the pandemic as domestic travelers initially flocked to resorts and business and international tourism lagged behind. Three Ace hotels, in Pittsburgh, Chicago and London, permanently closed during the pandemic.

Ace hotels, which tend to appeal to a younger, more creative clientele and primarily cater to leisure travelers, are less reliant on business guests than other urban properties. But Mr. Brenneke said the brand will grow beyond downtowns with plans to open resorts and luxury camping properties in the coming years. 

Sortis said it plans to build new Ace properties and acquire some existing properties that operate under the Ace flag. The Ace brand historically focused on management contracts over assets, and the acquisition deal includes only one lease, for its Seattle location.

“There’s going to be a lot of turnover in the hotel world,” Mr. Brenneke said. “When turnover happens it creates the opportunity for a new brand to come in.” 

Boutique hotel brands, which traditionally originated from independent, smaller properties that weren’t bound by a corporate brand’s design or operating rules, have been growing in popularity and are increasingly becoming institutionalized, said

Sean Hennessey,

a hotel consultant and associate professor at New York University’s Tisch Center of Hospitality. 

Major hotel chains have launched their own “boutique” brands, starting with Starwood Hotels & Resorts Worldwide Inc.’s roll out of W Hotels in 1998. Big hotel companies are eager to acquire boutique brands, but news of these deals can upset loyal guests who worry that the hotels will lose their flair, Mr. Hennessey said. And boutique hotels that remain independent face stiffer competition, he said.

“It’s made it more difficult to stand out as an individual property competing against the more visible hotel companies,” Mr. Hennessey said. 

Ace, which opened its first location in Seattle in 1999, is known for inviting local residents as well as overnight guests to use its facilities. On a recent Tuesday afternoon, the lobby of its year-old Brooklyn, N.Y., location, decorated in neutral tones with a bar in back, was filled with young professionals sipping coffee and tapping on laptops from low-slung couches and armchairs. 

“That’s really what the brand was built on—not only the travelers but the local community,” Mr. Brenneke said.

Ace was co-founded by Seattle native

Alex Calderwood,

who before entering the hotel business opened Rudy’s, a trendy barbershop that now has 31 locations nationwide. Mr. Calderwood died in 2013 at age 47. Sortis acquired Rudy’s out of bankruptcy in 2020. 

Write to Kate King at [email protected]

“The brand’s just done an incredible job over the years of building a very loyal customer base and really a strong community,” Mr. Brenneke said. “It’s really carved out a unique niche.”

Ace currently has 11 hotels in operation, including Los Angeles, New York, Kyoto, Japan, and one in New Orleans under its new luxury brand, Maison de la Luz.

Sortis, which invests in and acquires hospitality brands ranging from sushi chains and coffee shops to hotels and barbers, said it plans to more than double the number of hotels in its portfolio to 30, the majority of which will be Ace Hotels. The new owner plans to expand in the U.S. and internationally and push the brand beyond its traditional urban milieu. 

City hotels have been the slowest to recover from the pandemic as domestic travelers initially flocked to resorts and business and international tourism lagged behind. Three Ace hotels, in Pittsburgh, Chicago and London, permanently closed during the pandemic.

Ace hotels, which tend to appeal to a younger, more creative clientele and primarily cater to leisure travelers, are less reliant on business guests than other urban properties. But Mr. Brenneke said the brand will grow beyond downtowns with plans to open resorts and luxury camping properties in the coming years. 

Sortis said it plans to build new Ace properties and acquire some existing properties that operate under the Ace flag. The Ace brand historically focused on management contracts over assets, and the acquisition deal includes only one lease, for its Seattle location.

“There’s going to be a lot of turnover in the hotel world,” Mr. Brenneke said. “When turnover happens it creates the opportunity for a new brand to come in.” 

Boutique hotel brands, which traditionally originated from independent, smaller properties that weren’t bound by a corporate brand’s design or operating rules, have been growing in popularity and are increasingly becoming institutionalized, said

Sean Hennessey,

a hotel consultant and associate professor at New York University’s Tisch Center of Hospitality. 

Major hotel chains have launched their own “boutique” brands, starting with Starwood Hotels & Resorts Worldwide Inc.’s roll out of W Hotels in 1998. Big hotel companies are eager to acquire boutique brands, but news of these deals can upset loyal guests who worry that the hotels will lose their flair, Mr. Hennessey said. And boutique hotels that remain independent face stiffer competition, he said.

“It’s made it more difficult to stand out as an individual property competing against the more visible hotel companies,” Mr. Hennessey said. 

Ace, which opened its first location in Seattle in 1999, is known for inviting local residents as well as overnight guests to use its facilities. On a recent Tuesday afternoon, the lobby of its year-old Brooklyn, N.Y., location, decorated in neutral tones with a bar in back, was filled with young professionals sipping coffee and tapping on laptops from low-slung couches and armchairs. 

“That’s really what the brand was built on—not only the travelers but the local community,” Mr. Brenneke said.

Ace was co-founded by Seattle native

Alex Calderwood,

who before entering the hotel business opened Rudy’s, a trendy barbershop that now has 31 locations nationwide. Mr. Calderwood died in 2013 at age 47. Sortis acquired Rudy’s out of bankruptcy in 2020. 

Write to Kate King at [email protected]