SoTHERLY Hotels Inc. Announces Acquisition of Historic Atlanta Hotel
Wednesday April 2nd, 2014 - 10:54AM ES
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ATLANTA—SoTHERLY Hotels Inc. has acquired the Georgian Terrace Hotel, an adjacent 698-space parking structure and a 0.6-acre development parcel for $61 million. The 326-room independent, full-service hotel is located in Atlanta’s revitalized Midtown business district. Chesapeake Hospitality will manage the Georgian Terrace Hotel.
As a part of the transaction, the SoTHERLY Hotels Inc. closed on a $41.5 million loan with Bank of the Ozarks collateralized by a first mortgage on the property. The loan carries a floating interest rate of the 3-month LIBOR rate plus 3.75% with a 4.00% interest rate floor and amortizes on a 25-year schedule following a 12-month interest only period. Also as part of the transaction, the company closed on a $19 million loan with Richmond Hill Partners, LP and Essex Equity Joint Investment Vehicle, LLC. The loan carries a fixed interest rate of 10.00% and a one-year term. Proceeds from both loans were used to fund the acquisition in addition to available cash.
Drew Sims, CEO of SoTHERLY Hotels Inc., commented, “The Georgian Terrace Hotel is a significant acquisition for SoTHERLY Hotels. This iconic hotel gives us a landmark property in the second largest MSA in the Southern United States. Atlanta also serves as a primary feeder market to our existing hotel portfolio and therefore it has been a high priority for us. We are pleased to not only enter this market but to acquire a property of this caliber. We believe there is tremendous upside to both the market and the hotel.”
The historic Georgian Terrace Hotel, nicknamed the “Grand Dame of Atlanta”, was built in 1911. Located directly across from the “Fabulous” Fox Theatre along Atlanta’s Midtown Mile, the hotel is situated at the intersection of Peachtree and Ponce de Leon Streets. The hotel features guestrooms averaging over 800 sq. ft. each, the largest in the market, over 16,000 sq. ft. of meeting space, and three food and beverage outlets.
The hotel was modernized in 1991 with the addition of a new tower. Since 2009, over $15 million has been invested in the hotel to renovate the guestrooms and public spaces in order to position the property as “Atlanta’s Modern Classic.” The hotel is a member of Preferred Hotels Group, Historic Hotels of America, and is listed on the National Register of Historic Places.
For year-end 2013, the Georgian Terrace Hotel operated at approximately 72% occupancy, with an average daily rate of approximately $135.85, room revenue per available room of approximately $97.44, hotel earnings before interest, taxes, depreciation, and amortization of approximately $4.5 million, and net operating income after capital reserves of $3.7 million.
Tags: SoTHERLY Hotels • Georgian Terrace Hotel • Hospitality • Acquisitions • Sources of Funding •
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