Hamptons Hotel Firm Launches New $150M Fund

Atlantic Equity Partners, Hamptons, North Fork, investment
Atlantic Equity Partners purchased the Wainscott Inn for $12.3 million over the summer of 2022.
Courtesy of Atlantic Equity Partners

Atlantic Equity Partners, the investment group that owns Wainscott Inn in the Hamptons and The Menhaden on the North Fork, hopes to raise $150 million to help the firm bring major energy efficiency upgrades to its hotels.

Last week, Atlantic Equity Partners, considered “an impact-minded” real estate private equity firm, announced the launch of its new Fund II which it says “will deploy capital to acquire and sustainably redevelop hospitality real estate with a double-bottom-line approach.” The new fund’s target is $150 million from limited partners globally, with $25 million in capital already committed.

“The launch of Fund II is a proud moment that builds on the momentum of our first fund, and it marks a major milestone for our larger impact vision to decarbonize the built environment in a range of assets far wider than hospitality alone,” said Jonathan Hoenig, Managing Partner & CEO of Atlantic Equity Partners.

“The climate crisis requires an urgent response from investors, and addressing carbon in all types of man-made structures and settings will be essential to move the needle on climate goals that protect people and planet. These dynamics offer investors a unique opportunity to achieve both attractive returns and meaningful, positive impact,” he added.

Hoenig plans to bring such improvements to local assets.

The New England-based firm purchased The Menhaden, a 16-room hotel on Front Street in 2021 for $8.25 million. The Menhaden had opened just three years earlier.

Hamptons, hotel, investment firm
The Menhaden sold in April for $8.25 million.Courtesy of Atlantic Equity Partners

In June of 2022, Atlantic Equity Partners purchased the nearly seven-acre Hamptons hospitality mainstay for $12.3 million. Despite its name, Wainscott Inn is technically located in the Village of Sagaponack, just west of Wainscott.

“Fund II seeks to capture the tremendous opportunity offered by the current macroeconomic backdrop of a cooling global economy, high-interest rates, and softening commercial real estate valuations to continue investing in hotels and related properties, which was also the focus of the firm’s first fund,” according to the announcement. “Atlantic Equity Partners plans to source exceptional properties in highly desirable markets under unique circumstances, acquiring them at an attractive discount and unlocking immediate upside through repositioning. Then, the firm will upgrade and decarbonize the properties to capitalize on growing consumer demand for engaging with businesses that have sustainable business practices.”

Improvements include retrofitting the properties with electrified systems and implementing on-site renewable energy generation. Energy costs can be reduced by nearly 100% with a short-term payback period, the firm says.

“We are convinced that early change-makers in the decarbonization of built environment assets will benefit from growing demand among consumers and policymakers to address climate change,” said Hoenig. “There will be a first-mover advantage in this space for those who recognize the benefits of electrifying real estate operations. Investors who are forward-thinking about the inevitable impact of future policy change, related to carbon reduction in real estate and business operations, stand to benefit greatly.”

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