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."
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.