This purchase marks the second of a programmatic, focused investment venture between Sage and Whitman Peterson, wherein they plan to acquire a sizable portfolio of select-service hotels in need of capital, operational, and/or brand improvements.
This new transaction adds 11 hotels to the venture, bringing Sage's total hotels under management to 76 nationally. The newly added properties are located in several metropolitan areas, including Denver, Indianapolis, and Dallas and Austin.
"The properties are geographically diverse and encompass a variety of top tier brands in the Marriott, Hilton, and Hyatt systems," said Michael Everett, CIO for Sage Hospitality. "We see significant upside from capital expenditure and operational improvements, which is perfectly inline with our investment strategy. With an acquisition price of approximately $70,000/key and an approximately 10 percent cap rate on trailing 12 income – we believe this portfolio offers a unique combination of in-place yield and attractive upside, at a basis after renovation that is well below replacement cost."