What’s Hot: Hotel Companies Buy Properties in Key Locations

NATIONAL REPORT—Hotel companies have been busy acquiring properties lately, focused—not surprisingly—on location.

The Kor Group, in a joint venture with the Merchant Banking Division of Goldman, Sachs & Co. LLC, has acquired the Custom Hotel in Los Angeles, citing its location as a major reason for the move.

“There’s a huge need for design-driven, budget-conscious hotel options on the Westside of L.A., where business travelers are looking for easy access to Playa Vista and Silicon Beach, and leisure travelers want boutique options that serve as a gateway to L.A.’s beach communities,” said Brian De Lowe, president and partner at The Kor Group and president and co-founder of Proper Hospitality.

The 250-room Custom Hotel sits within close proximity to Loyola Marymount University, the Otis School of Design, and the beachside community of Playa Del Rey. Renowned mid-century architect, Welton Beckett, originally designed the 12-story building in 1968. It features modern lines and minimalist design touches, 7,000 sq. ft. of indoor and outdoor meeting space, and a two-level pool deck, restaurant and bar.

Similarly, Condor Hospitality Trust recently closed on the acquisition of two Texas hotels for $38.8 million: the Fairfield Inn & Suites El Paso Airport and the Residence Inn Austin Airport.

“With the closing of the Fairfield Inn & Suites El Paso Airport and the Residence Inn Austin Airport, we have now closed since the fourth quarter of 2015 approximately $240 million of acquisitions representing 12 high-quality, premium-branded select-service hotels consisting of a total of 1,593 rooms. These two most recently acquired hotels, with an average age of less than two years and branded under two high-quality Marriott flags, fit squarely within our investment strategy of acquiring premium-branded select-service assets in attractive secondary markets,” said Bill Blackham, Condor’s CEO. “Our extremely disciplined assemblage of a very high-quality portfolio of select-service hotels has led to strong RevPAR outperformance over the national averages, as demonstrated by our 7.4% RevPAR year-over-year growth in the first half of 2017 for our new investment platform hotels.”

The hotels will continue to be managed by Aimbridge Hospitality.

The company also has a third Marriott-branded hotel, the TownePlace Suites Austin North Tech Ridge, under contract for $19.75 million, which is expected to close in the first quarter of 2018.

Finally, Hunter Hotel Advisors represented regional developers in the sale of the newly opened 105-suite Home2 Suites Rock Hill, SC. The Home2 Suites was developed as a JV between Milkam Hospitality LLC based in Wake Forest, NC, and New River Hotels, based in Greensboro, NC.

Noble Investment Group, based in Atlanta, acquired the hotel three months after opening in May. According to Hunter Hotel Advisors, the company was attracted to the newly constructed hotel’s high yield potential along the I-77 corridor just south of Charlotte, NC.