Transactions Heat Up Hospitality

NATIONAL REPORT—Florida, Maryland, Texas, Chicago, California and Washington, DC, are home to recent hotel transactions. Here’s a closer look at some of the deals:

Hotel Developer Urbanica Expands Portfolio in Miami
Urbanica The Hotels’ founders, Diego Colmenero and Charlie Porchetto, have acquired a $40-million undeveloped beachfront lot in North Beach in Miami. They purchased the 0.98-acre property from China City Construction (CCC) with imminent plans to develop a 20-story, 200-room lifestyle hotel. Slated to open in approximately two years, it will have a signature restaurant helmed by the brand’s world partner, Chef Fernando Trocca; an indoor bar, pool bar and beach service; and other amenities. After the success of The Meridian, a 71-room property, Urbanica The Hotels is creating its own hospitality district in Miami Beach’s South of Fifth neighborhood with three more hotels. The remodeled pre-war Kaskades Hotel opened this summer, and is managed by Urbanica as an independent operation. The Euclid Hotel is slated to open this October with 30 guestrooms. The Fifth is slated to open in mid 2020 with 52 guestrooms. The Biscayne in the Edgewater area is scheduled to open in late 2020.

Pebblebrook Hotel Trust Completes Sale of Rouge Hotel
Pebblebrook Hotel Trust has closed on the sale of the 137-room Rouge Hotel in Washington, DC, for $42 million to a third party. The sale price of $42 million reflects a 17.4x EBITDA multiple and a 5% net operating income capitalization rate based on the hotel’s operating performance for 2018. Based on the trailing 12-month period ended June 30, the contracted sales price reflects a 19.3x EBITDA multiple and a 4.5% net operating income capitalization rate. The net operating income capitalization rates are after an assumed annual capital reserve of 4% of total hotel revenues. Proceeds from the sale of Rouge Hotel will be utilized for general business purposes, which may include reducing the company’s outstanding debt. As a result of this completed sale, the company estimates its total net debt to trailing 12-month corporate EBITDA will be approximately 4.6 times at the end of the third quarter 2019.

Florida Hotel Under New Management and Ownership
GF Management, through its affiliate, has acquired the Courtyard by Marriott Lake Buena Vista at Vista Centre, marking the company’s fourth ownership venture in Orlando, FL. The acquisition of the Courtyard by Marriott Lake Buena Vista at Vista Centre continues to align with GF Management’s growth objectives and marks the fourth Marriott-branded hotel owned by the company. It now owns and/or manages 12 hotels and resorts within the Marriott portfolio, consisting of nearly 3,500 guestrooms and suites. Renovations at the 308-room Courtyard by Marriott Lake Buena Vista at Vista Centre are due to begin this fall. The guestroom refresh will include converting all double/double guestrooms to queen/queen guestrooms, as well as adding new tile and glass-enclosed showers in all guest bathrooms. The renovation will also include the reimagining of the exterior facade, new lighting highlighting its landscape, and outdoor pool improvements, including the addition of a kids’ splash pool.

HREC Arranges Sale of the Hampton Inn Salisbury, MD
HREC Investment Advisors has arranged the sale of the 150-guestroom Hampton Inn located in Salisbury, MD. HREC Investment Advisors represented the seller during the transaction. The sale was negotiated by Ketan Patel, managing director, Kevin Hanley, SVP, and Dana Weinberg, an affiliate broker in Maryland. Salisbury is the seat of Wicomico County, which constitutes the area of Maryland east of the Chesapeake Bay. Today, Salisbury attracts a variety of businesses and economic activity in addition to the county, state and federal government offices. The Hampton Inn is located within close proximity to some of these key demand generators, including Perdue Farms and Salisbury University. The Hampton Inn is also located close to Ocean City, MD.

HVS Brokerage & Advisory Closes Sale of the Candlewood Suites Port Arthur/Nederland
HVS Brokerage & Advisory has closed on the sale of the 65-key Candlewood Suites Port Arthur/Nederland in Nederland, TX, for an undisclosed amount. Drubo Hospitality Inc. from Los Angeles acquired the Candlewood Suites Port Arthur/Nederland from the seller, US Harmony LLC from Houston. This asset is the buyer’s second hotel transaction with HVS and its second hotel acquisition in Texas. The hotel, which was built in 2001, is located within the petrochemical Beaumont/Port Arthur market. Major petrochemical players, including Exxon, Motiva, Total SA, Nova Chemicals Corp and Chevron, have announced multiple refinery expansions in the market totaling over $10 billion of economic investment in the coming years.

JLL Arranges Financing for new Hyatt House Hotel in Chicago
JLL announces that it has arranged a $61-million refinancing for Hyatt House Fulton Market, a 200-room, newly constructed hotel in Chicago’s Fulton Market District. JLL worked on behalf of the borrower, a partnership between Sterling Bay and Wheelock Street Capital, to place the five-year, floating-rate loan with Argentic Real Estate Investments LLC. Loan proceeds will be used to retire the construction loan. Hyatt House Fulton Market is the only extended-stay product in the market, the only branded hotel in Fulton Market and the first hotel to feature the brand’s newest design.

Sonnenblick-Eichner Arranges Financing for Post Ranch Inn
Sonnenblick-Eichner Company has arranged first mortgage financing for the Post Ranch Inn, a 39-room, full-service, luxury resort located in Big Sur, CA. The 10-year, interest-only, non-recourse loan has a fixed interest rate of 3.29%. The credit spread was sub-120 basis points.

Overlooking the Pacific Ocean from the cliffs of Big Sur, Post Ranch Inn has 39 guestrooms in 27 buildings, a spa, two cliff-top infinity-edge pools, an outdoor heated lap pool, private hiking trails, yoga and meditation decks, a fitness center and restaurant, Sierra Mar.

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