NATIONAL REPORT—Where are hoteliers buying and selling? Here’s more on the recent transactions:
Sonnenblick-Eichner Arranges $36.3M Loan for Acquisition of CA Hotel
Sonnenblick-Eichner Company has arranged $36.3 million of first mortgage financing for the acquisition of the DoubleTree by Hilton Hotel Campbell – Pruneyard Plaza, a 169-room, full-service hotel located in downtown Campbell, CA.
The long-term, fixed-rate loan facilitated the acquisition of the property and provides funds for a $5.8 million renovation of the property. The 12-year loan was provided by a life insurance company and was priced at 4.48% with four years of interest-only payments followed by amortization on a 30-year schedule.
Wexford Lodging Advisors, Trinity Private Equity Group Complete JV Acquisition
Wexford Lodging Advisors and Trinity Private Equity Group have acquired the 138-suite DoubleTree Suites by Hilton Hotel Nashville Airport in Nashville, TN. The joint venture will invest approximately $2.5 million to upgrade the property with a targeted completion date of year’s end. HVMG will continue to operate the hotel.
HVS Brokerage & Advisory Complete Sale of Houston Property
HVS Brokerage & Advisory assisted Shree Maha Laxmi LLC in the sale of the 83-unit Candlewood Suites Houston NW Willowbrook.
“Within 11 days of going to market, we sourced an out-of-state, 1031-exchange buyer. Despite the challenge of the government shutdown and the buyer’s pursuit of an SBA 7(a) loan, we worked closely with the seller and buyer throughout the transaction, resulting in a deal that was mutually beneficial to both parties,” said James Rebullida, an HVS Brokerage & Advisory associate.
Team members Drew Noecker, Eric Guerrero and Michael Handy also participated in the transaction.
AHIP to Buy Land Associated with MD Hotel
American Hotel Income Properties REIT LP has exercised its option to buy out the ground lease associated with its Fairfield Inn & Suites White Marsh hotel in Baltimore, and has completed the purchase of land for $1.9 million plus closing costs. This acquisition is expected to increase AHIP’s cash flow by approximately $165,000 annually, through the elimination of lease payments previously expensed for this property.
The 116-room Fairfield Inn & Suites White Marsh was acquired by AHIP in June 2017, alongside 17 other properties along the U.S. eastern seaboard. It is the only hotel AHIP owns that was subject to a ground lease; one other hotel is subject to an air rights lease. With the purchase of this land, 99% of AHIP’s hotels are now located on owned property.
Juniper Capital Partners and IMH Financial Make First New York Acquisition
An affiliate of Juniper Capital Partners and an affiliate of IMH Financial Corporation have acquired The Time Nyack hotel in New York’s Hudson Valley. Plans to enhance the entire hotel include a refreshed look at the property’s culinary offerings and the debut of a new rooftop experience to showcase the views of the Hudson River and newly reconstructed Tappan Zee Bridge. The 133-room Time Nyack first opened in May 2016.
MGM Resorts and MGP Complete Transaction for MGM Northfield Park
MGM Resorts International and MGM Growth Properties LLC (MGP) have completed the previously announced transaction whereby MGM Resorts will acquire the operating assets of the Hard Rock Rocksino Northfield Park from MGP and lease the real property from MGP. MGM Resorts also announced it has officially rebranded the property as MGM Northfield Park. As consideration for the transaction, MGM Growth Properties Operating Partnership LP redeemed approximately 9.4 million of its operating partnership units from a subsidiary of MGM Resorts, representing a purchase price of $275 million subject to customary adjustments. Following the redemption, MGM Resorts’ economic ownership stake in the operating partnership is approximately 69%.
Park Hotels & Resorts Sells Hilton Nuremberg for $17.5M
Park Hotels & Resorts Inc. has closed on the sale of the 152-room Hilton Nuremberg hotel located in Nuremberg, Germany, for gross proceeds of $17.5 million, or $115,000 per key. When adjusted for Park’s anticipated capital expenditures of $10.1 million for the hotel, the sale price represents a 3.5% capitalization rate on the hotel’s 2018 net operating income (5.6% excluding CapEx), or 21.2x (13.4x excluding CapEx) the hotel’s 2018 EBITDA. Park has now sold 15 non-core assets for nearly $590 million over the last 18 months.
Apple Hospitality REIT Completes Sale of Nine Hotels
Apple Hospitality REIT Inc. completed the sale of nine hotels for a total sales price of $95 million on March 28. The company had previously announced the contracts for the sale of the portfolio. The company used the sale proceeds to reduce the outstanding balance of its revolving credit facility and anticipates recognizing a gain on the sale in the first quarter of 2019.
Hotel Equities, Virtua Partners Close on Fairfield Inn & Suites by Marriott in Colorado Springs
Hotel Equities (HE), through its affiliate Virtua Partners, has purchased the Fairfield Inn & Suites Colorado Springs North/Air Force Academy. The hotel, located at 15275 Struthers Rd. in Colorado Springs, is the closest hotel to the U.S. Air Force Academy north entrance. Virtua Credit Corporation arranged the financing for the purchase.
Hotel Equities operates the Marriott hotel and will continue to oversee the asset. The hotel owner, operator and development firm currently manages 30-plus Fairfield Inn & Suites and more than 120 hotels throughout the U.S. and Canada. HE and Virtua Partners joined forces last year to expand upon their current hospitality portfolio through new development and acquisition opportunities.
“Since assuming management of the asset, Hotel Equities has added significant value through implementation of their proprietary labor models and cost initiatives,” said Quinn Palomino, principal of Virtua Partners. “Our investment into the property and HE’s management expertise will facilitate optimal performance results and maximum returns for investors.”
HFF arranges sale of Courtyard on the Big Island in Hawaii
Holliday Fenoglio Fowler L.P. (HFF) has closed the sale of Courtyard by Marriott King Kamehameha’s Kona Beach Hotel, a 452-room, full-service beachfront hotel in Kailua-Kona on Hawaii’s Big Island. The HFF team marketed the property on behalf of the seller, Pacifica Hotels.
Courtyard by Marriott King Kamehameha’s Kona Beach Hotel was extensively renovated and converted in 2011. The hotel comprises two connected six-story towers that feature more than 20,000 sq. ft. of flexible indoor and outdoor meeting space; more than 18,000 sq. ft. of retail, including a full-service spa; fitness facility; yoga studio; 24-hour business center; outdoor pool and patio; tennis courts; and five food and beverage outlets, including Honu’s on the Beach Restaurant, Billfish Poolside Bar & Grill and The Island Breeze Hawaiian Lu’au.
AAM 15 Acquires Eighth Hotel
The growth of AAM 15 Management LLC continues as the Embassy Suites of Portland, ME, is added to the hotel portfolio.
As the third AAM 15 Hilton-branded property, David R. Masse, founder and CEO of AAM 15 Management, commented that “success has been proven in the strength of Hilton Honors and we see the Embassy Suites Portland as adding great value and returns to our investors. It is a top performing hotel in its competitive set, with a near unprecedented RevPAR Index (RGI) nearing 200. While the hotel undertook a recent renovation of its lobby space, we have an extensive property improvement plan that will give lift to the remaining public space, guestrooms, pool and fitness area and overall curb appeal, enhancing both the property value and guest experience.”
The Embassy Suites Portland features 119 suites, a full-service restaurant and lobby bar and nearly 2,000 sq. ft. of meeting and special event space.