While the big news is Blackstone Group's rumored imminent sale of Boston office properties for a reported $2.5 billion to $3 billion, the firm, which recently took La Quinta and Hilton Worldwide pubic, just snapped up a portfolio of 15 select-service hotels on the east and west coasts, a signal of the improving hotel industry, particularly in the limited-service segment. Financial terms of the deal were not disclosed.
The seller of the portfolio was Spartanburg, S.C.-based OTO Development; they were represented by Jones Lang LaSalle.
The portfolio includes 1,856 rooms across 15 hotels located in Alabama, California, Connecticut, Florida, Pennsylvania, and metropolitan Washington D.C.
“This portfolio is recognized as one of the highest quality select service portfolios on the market and received a great deal of interest from numerous investors,” said Mark Fair, a JLL managing director, who helped facilitate the transaction. “The assets were aggressively pursued, showcasing the appetite investors have for select-service portfolios with scale for institutional capital. The portfolio features diverse geographic locations, including seven properties in high barrier to entry markets in Southern California.”
The portfolio buy by Blackstone is the most recent since the company acquired a 16-hotel portfolio from Hersha Hospitality Trust for $217 million in September. Those hotels were also in the select-service segment.
The sale perhaps signals a change in how hotels are transacted, a move from one-off buys to portfolios, when feasible. JLL told GlobeSt.com that investors are "keen on select service hotel properties—especially when this variety comes in the form of a portfolio." Select-service hotel transactions reportedly increased 145 percent during the first eight months of 2013 with momentum continuing into 2014, according to JLL’s research.
The hotels in the portfolio include: In California, the Hampton Inn & Suites Thousand Oaks; Hyatt Place Los Angeles’ Residence Inn Camarillo; SpringHill Suites Irvine John Wayne Airport Irvine/Orange County; Residence Inn San Diego North /San Marcos; Homewood Suites in Fresno; SpringHill Suites Fresno; Residence Inn Birmingham Hoover in Birmingham, Ala.; SpringHill Suites Birmingham Colonnade in Birmingham, Ala.; Residence Inn Gainesville I-75 in Gainesville, Fla.; Hampton Inn & Suites Mt. Vernon/Belvoir-Alexandria South Area in Alexandria, Va.; SpringHill Suites Columbia in Columbia, Md.; Hampton Inn & Suites Manchester in Manchester, Conn.; SpringHill Suites Erie in Erie, Pa.; and Hampton Inn & Suites National Harbor / Alexandria Area in Oxon Hill, Md.
All the hotels are less than five years old, on average.