It's no real surprise anymore to hear of a multimillion-dollar hotel deal forged by some Middle East conglomerate. What is a surprise is when a Middle East conglomerate makes a deal for a hotel, in a secondary U.S. market, at a price tag that is considered peanuts for most hotel groups operating in the UAE. And that is exactly the news today.
UAE-based Al Habtoor Group, which counts such luxury properties as the Waldorf Astoria Palm Jumeirah, the InterContinental Budapest and the Hilton Beirut Metropolitan Palace among its portfolio, has purchased the President Abraham Lincoln hotel, in Springfield, Ill., which currently and will reportedly continue to operate under Hilton's DoubleTree flag.
This would be the first hotel the group owns outside EMEA. The price tag? Well, it was undisclosed; however, the State Journal-Register reports that the hotel is valued at $8.1 million. The hotel's current owner, Steve Horve, purchased the President Abraham Lincoln hotel for $6.5 million in an auction in 2009 from the state of Illinois state.
The deal should close in two weeks.
And here's the backstory to the curious acquisition by Khalaf Ahmad al Habtoor, who Forbes, back in 2006, listed as the 335th richest man in the world, worth more than $2.3 billion.
According to the Illinois Times, Horve received an offer to buy the property about a month ago after Habtoor was in the area to see former president Jimmy Carter speak at Illinois College.
"While he was in Springfield, he stopped by the hotel, walked around and said 'I want to buy this,'" Horve told the Illinois Times. "They wanted to buy it in two weeks. You can’t buy a house in two weeks."
This apparent acquisition is an anomaly for Al Habtoor, which is currently building a new development in Dubai: the $3-billion Al Habtoor City. The mega project, once completed, will be home to three Starwood-branded hotels: a Westin, W hotel and a St. Regis. Al Habtoor has partnered with Starwood before. Back in 2012, it acquired the 218-room Le Méridien Budapest Hotel.
While many international investment groups have mostly eyed luxury or trophy properties in the U.S., by all accounts this is one of the first times one of these groups has acquired a hotel in a secondary U.S. market.
It's a far cry from a China investment group's $1.95-billion acquisition of the Waldorf Astoria in New York, but could also signal more competition for REITs and PE groups, which look for acquisitions within the U.S.