CWI shells out $85M for dual-brand Denver hotel

Carey Watermark Investors, a non-traded real estate investment trust focused on investing in lodging properties, announced that it has acquired a 302-room, dual-brand select-service hotel, located in Denver's Central Business District. CWI's total investment in the property is approximately $85 million.

The hotel is the Hampton Inn & Suites/Homewood Suites by Hilton Denver Downtown/Convention Center.

Michael Medzigian, CEO of CWI, said: "The acquisition represented the opportunity to invest in a newly redeveloped, quality dual-branded hotel with strong brand affiliations in a strong domestic market. Given these attributes, we believe that the investment will be a solid cash flow-generating addition to our growing portfolio."

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CWI cites these reasons for the purchase:

Strong market: In 2013, average hotel RevPAR in the greater Denver
      area increased by 8.6%, with occupancy and ADR increasing by 5.7% and
      2.7%, respectively. Strengthening market fundamentals combined with
      Denver's status as a leading destination for corporate, group and leisure
      visitors have positioned the Denver hotel market well for 2014. In
      addition, a revitalized downtown core has made the Denver Central
      Business District (CBD) the cultural, entertainment and business hub of
      the metropolitan area attracting residents, visitors and companies and
      hosting over 13 million visitors each year.
 
   -- Downtown CBD location: The hotel is located at 550 15th Street in the
      heart of the downtown CBD. Primary demand generators include major
      corporations and businesses within the CBD, the Colorado Convention
      Center and Denver's premier leisure attractions, including the 16th
      Street Mall, Coors Field and Pepsi Center. Since 2003, the CBD has
      welcomed approximately $4.6 billion of public and private sector
      investment.
 
   -- Attractive all-in acquisition cost: The $85 million investment includes
      an $81.5 million purchase price as well as acquisition-related costs and
      planned capital expenditures. The acquisition was financed with $53
      million of debt.
 
   -- Strong brand affiliation: The Hampton Inn & Suites and Homewood Suites
      brands are Hilton Worldwide's upper mid-scale select-service and upscale
      extended-stay brands.
 
   -- High quality design and development: Opened in 2013, the building is an
      adaptive re-use redevelopment of a 1960s-era office building. As a result,
      the dual-branded hotel affords more open expansive lobby areas and larger
      guestrooms and public spaces, compared to the select-service supply in
      the market.

 

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