NATIONAL REPORT—The following transactions are showing an advantage as value-add investments. For example, in Pennsylvania, NAI Global, as exclusive advisor to an affiliate of True North Management Group, is offering for sale the fee simple interest in the 327-key DoubleTree Philadelphia Valley Forge.
Opened as a Hilton in 1971 and converted to a DoubleTree in 2012, the hotel has 60 suites, more than 24,000 sq. ft. of meeting and event space (including a 7,000-sq.-ft. ballroom) and two full-service restaurants: T. Burke’s Gastro Pub and Three01. Additional amenities include an outdoor heated swimming pool, fitness center, in-room dining, business center, gift shop, café, community room, outdoor terrace, and surface and garage parking.
Located at the intersection of the Pennsylvania Turnpike (I-276) and U.S. Route 202/West DeKalb Pike, the property is one mile east of the King of Prussia Mall, the second-largest shopping mall in the country, and 1.5 miles from the 536-acre King of Prussia Business Park, which includes offices for Lockheed Martin, McKesson Health Solutions, Arkema Inc., BNY Mellon, Intel, FedEx and Renmatix.
According to NAI Global, renovations needed at the hotel are primarily PIP related.
The property is being offered unencumbered by management. According to NAI Global, the property currently generates an NOI of approximately $2.9 million, and underwent more than $5.9 million ($18,100 per key) of capital improvements since the beginning of 2013. It noted the most significant projects focused primarily on deferred maintenance and back-of-house items, which have upgraded the majority of the building’s mechanical systems. NAI Global added as a result, new ownership can focus capital improvements dollars primarily on upgrading the dated front-of-house and implementing the brand-mandated PIP, which “represent true guest-facing, value-add projects with a significant return-on-investment.”
Extended-Stay Deal in Arizona Adds Apt.
In Arizona, Amber Hotel Co. is offering the American Regency Suites at 250 Carroll Dr. in Sierra Vista, located near the Fort Huachuca Military Base, and one hour from Tucson and three hours from Phoenix.
The interior-corridor, extended-stay property’s 56 rooms, which range between 437 sq. ft. and 575 sq. ft. feature full kitchens, including a stove, sink, fridge, microwave and a dishwasher.
Amber Hotel Co. noted the property, on the block at $2.2 million, also offers a three-bedroom, 1,000-sq.-ft. apartment, a distinct value for an owner/operator who wants to be on site.
New Owner Takes on New Mexico SpringHill Suites
Another extended-stay property has found a new owner in New Mexico. HREC Investment Advisors arranged the sale of the 101-suite Marriott SpringHill Suites located in Las Cruces to an unnamed California-based investor that owns and operates a hotel portfolio throughout the Southwest under major brands, including Marriott and Hilton.
“With HREC closing three hotel sales in New Mexico this year, we are seeing substantial investor interest in the state due to solid hotel performance primarily driven from growth in the military, defense and government sectors,” commented Mike Armstrong, principal in HREC’s San Diego office, who represented the seller. “Many hotel buyers we work with are excited about the Las Cruces market. It is a dynamic market with multiple demand drivers, including education, defense, aerospace, military and healthcare, and [investors]are actively seeking to buy hotels here.”
The hotel is located near New Mexico State University, the Downtown Mall, Las Cruces Convention Center and Memorial Medical Center.
Las Cruces, the second largest city in the state behind Albuquerque, also is known for Spaceport America, the world’s first purpose-built commercial spaceport and is home to Richard Branson’s Virgin Galactic, as well as entrepreneur Elon Musk’s SpaceX program, all of which is helping bring additional value to the market dynamic.