Concord Hospitality Enterprises has sold a portfolio of 13 select-service hotels to companies owned by a global investment fund for approximately $240 million in an all-cash transaction. Concord will continue to operate the hotels under a long-term management agreement. The portfolio is comprised of a total of 1650 rooms representing 11 Marriott and two Hilton-branded hotels.
"This sale is a continuation of our on-going plan to strategically sell stabilized assets while retaining management,” said Mark Laport, president and CEO of Concord Hospitality. “This gives our investors an attractive return on their development investment while providing long-term, sustainable growth opportunities for the companies that buy these assets.”
“With the exception of one hotel, the average age of the hotels is under five years old, and all were developed, rebranded or substantially updated by Concord, so they bring with them our reputation for quality construction and adding value through best in class sales and operations management," Laport said. “Each hotel is in excellent physical condition, and we are working closely with the brands to implement any necessary Product Improvement Plans (PIP) to ensure the hotels sustain strong RevPAR premiums well into the future.”
Hodges Ward Elliott brokered the transaction.
“Concord remains very committed to developing in markets where we see long-term potential,” Laport said. “We currently have 10 hotels under construction at a cost of approximately $440 million with financing in place and expect to open all of them over the next 18 months. We have an additional eight premium branded hotels well along the development process at a cost of approximately $400 million.” Laport also asserted Concord's continued commitment to developing LEED Certified hotels, with this wave of construction.
According to Laport, Concord will continue to focus its acquisition and development efforts in locations with high or growing concentrations of medical, educational, banking and technology industries, while growing its third party management sector through retained management of sold assets and strategic alliances with other ownership groups.