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Transactions Heat Up December

NATIONAL REPORT—Acquisitions and sales continue to heat up this month. In New York City, major real estate player Thor Equities has closed on its acquisition of The James New York-SoHo, with plans for “substantial” renovations and upgrades to the 114-key property.

The 18-story, 75,800-sq.-ft. boutique property, located at 27 Grand St., has three food and beverage outlets, and meeting and event space totaling 1,500 sq. ft. There’s also an outdoor rooftop swimming pool and fitness center, as well as 24-hour in-room dining. The hotel also displays the works of numerous local and international artists.

“The James New York is a quality property located in the center of a bustling area of SoHo, which has become one of New York’s premier live, work and play neighborhoods,” said Jack Sitt, VP, Thor Hospitality Group.

Jeffrey Davis of JLL brokered the deal.

Thor also owns the Palmer House Hilton in Chicago as well as Thompson Playa Del Carmen, Montage Los Cabos debuting in the spring and The Ritz-Carlton Mexico City opening next year.

RLJ Sells Fairmont Copley Plaza Boston

On the sales side, RLJ Lodging Trust sold the 383-room Fairmont Copley Plaza in Boston for $170 million or approximately $444,000 per key.

“We are pleased by the execution of the sale of this iconic asset at a very attractive valuation that is significantly accretive to our shareholders across a number of metrics. The disposition of this asset is consistent with our objectives of selling non-core assets and unlocking shareholder value,” commented Ross H. Bierkan, president/CEO.

The sale price represents approximately a 4.6% capitalization rate on the hotel’s 2017 projected net operating income. The sale price, which is accretive to the company’s implied EBITDA multiple, represents a hotel EBITDA multiple of approximately 16.5x based on the hotel’s 2017 projected hotel EBITDA.

The REIT intends to use the net proceeds from the sale for general corporate purposes, with a focus on paying down debt.

Westmont, EKG Make Buy

Washington, DC-based Westmount Capital Group LLC and Richmond, VA-based EKG LLC have acquired the Clifton Inn in Charlottesville, VA, and have retained Scout Hotel & Resort Management as its operator.

The 17-key boutique inn, which opened its doors to guests in 1983, occupies the historic 1799 estate of Thomas Jefferson’s daughter, Martha, and her husband, Thomas Mann Randolph.

“Clifton Inn’s historic legacy and 100-acre setting combine to give it great potential,” said Charles D’Angelo of Westmount Capital Group and managing director of the newly formed Clifton Inn LLC.

“We’re excited to work with Westmount Capital Group LLC to usher in a new era for Clifton Inn,” added Robin Kirk, Scout’s principal/CEO. “There are so many unique attributes of this hotel that dovetail beautifully with the Charlottesville area’s tourism appeals, from its natural beauty and wealth of historic and cultural attractions, to its growth as a wine tourism destination.”

Woodmont Lodging LLC, which provided advisory services to Westmount, will continue to asset manage the property.

EKG LLC, led by the McGeorge Family, was advised by Richmond, VA-based Canal Capital Management.

Yes, Virginia. There is Another Deal

Also in Virginia, Chatham Lodging Trust acquired the 219-suite Embassy Suites by Hilton in Springfield for $68 million, or approximately $310,000 per suite.

Chatham funded the purchase through available cash from its recently completed five-million-share offering that raised approximately $109 million. With this acquisition, Chatham has invested approximately 81% of the proceeds from the share offering.

“This is a superior-quality hotel that has been ranked the top hotel within the Embassy Suites brand each of the last two years,” said Jeffrey H. Fisher, Chatham’s president/CEO, commenting on the off-market transaction. “It generates an approximate 10% RevPAR premium to our existing properties while lowering our portfolio’s average age and needs no CapEx for several years.”

The LEED-certified hotel opened in 2013.

Chatham estimates it acquired the property at a year-one net operating income capitalization rate of approximately 7.5%.

The hotel will be managed by Island Hospitality Management, which is 51% owned by Fisher.

Record Number of Deals

PMZ Realty Capital LLC created its own holiday gift for itself, noting it’s closed a record amount of deals this year, with a total dollar volume of almost $1 billion representing financing for 60 hotels.

Among the deals were two in Glenwood, CO: a Hampton Inn, which completed an $8.3-million acquisition loan, a 70% loan-to-value loan that included an extensive PIP and 5% interest rate, and a Holiday Inn Express that completed a non-recourse acquisition loan.

In addition, the Indigo Riverwalk in San Antonio, TX, completed a $13-million five-year, interest-only acquisition loan with a regional bank via PMZ Realty Capital.

HREC Arranges Sale of PA Courtyard

HREC Investment Advisors arranged the sale of a 106-room Courtyard by Marriott in Wilkes-Barre, PA.

Ketan Patel, managing director in HREC’s Washington, DC, office and SVPs Mark von Dwingelo and Mark Rousseau in the Atlanta office represented the seller, Kingston Hotel Partners, LP during the transaction.

 

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