Developers turn attention to Midwest

The Al Habtoor Group acquired the President Abraham Lincoln hotel in Springfield, Ill., an uncommon purchase for a company from the UAE.

The Al Habtoor Group acquired the President Abraham Lincoln hotel in Springfield, Ill., an uncommon purchase for a company from the UAE.

National Report – We’ve all heard of the East Coast and West Coast biases, leaving the Midwest, frequently, as an afterthought. It’s the Rodney Dangerfield of America: it gets no respect.

But hotel buyers and developers are paying attention to the Heartland now.

In December, the UAE’s Al Habtoor Group reportedly acquired the President Abraham Lincoln hotel in Springfield, Ill.: a non-luxury hotel in a secondary U.S. market.

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Strange, perhaps, but it shows that the Midwest transactions market is alive and well.

And, there are more deals coming. Consider Milwaukee, where a developer group recently bought a six-story office building next to the Wisconsin Center from Towne Realty with plans to convert it into a hotel. The building sold for $4.5 million, according to state records.

The group, Jackson Street Management, was behind the building of the Milwaukee Marriott Downtown as well. It is also reportedly planning a 200-room Westin Hotel in Milwaukee.

There’s also word that Hawkeye Hotels is on the verge of acquiring the Hotel Fort Des Moines in the Iowa City.

Meanwhile, on the development front, brands are more and more attracted to the Midwest and, in particular, areas outside the top MSAs.

Value Place, the economy, extended-stay hotel brand, has entered into an agreement with Minnesota-based United Development Solutions for the development of three Value Place hotels in Minneapolis. The first three Value Place properties will be developed in Fridley, Burnsville and Mendota Heights.

“United Development Solutions is a great franchise partner for Value Place as we continue to expand our national footprint in the North Central region of the United States,” said Ron Burgett, EVP of franchise development at Value Place.

Marriott, too, is seeing potential for its AC Hotels brand in the Midwest. Properties in Kansas City and Chicago are already in the works, and now two more ACs are coming to the Midwest, in Minneapolis and Des Moines, Iowa. The latter will reportedly have 108 rooms and should open as early as this spring. The Minneapolis property is being developed by M.A. Mortenson Co. The nine-story, 244-room hotel should open by 2016.

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The company has hotels in Georgia and Texas slated to open in coming years.

This roundup features details on 15 new properties operating in the United States.

The survey is open to all multiunit hotel ownership and development companies. Results will be published in the October issue of Hotel Management.