Commercial real estate investment firm Avistone has completed acquisitions of the 105-room Hampton Inn & Suites Legacy Park—Frisco in Texas (pictured above) and the 95-room Hotel Indigo Sarasota in Florida, both in the last quarter of 2021.
“The acquisitions are strategically located in two of the fastest-growing markets in the U.S.,” Dan Culler, CEO, Avistone, told Hotel Business. “We purchased the Hampton Inn & Suites Legacy Park-Frisco in Frisco, TX, at approximately 25% below replacement cost in a market with a growth population of more than 5% annually over the last decade. The area’s demand drivers include the Dallas Cowboys World Headquarters; Riders Field (formerly Dr. Pepper Ballpark), home to the Texas Rangers Double-A affiliate; Comerica Center, which is the official practice facility and executive offices of the NHL Dallas Stars, as well as home of the NBA G League affiliate of the Dallas Mavericks; Toyota Stadium, which is home to Major League Soccer team FC Dallas; and the future home of the PGA of America, which will include two golf courses expected to host future Ryder Cups and PGA Championships.”
The hotel underwent a significant renovation in 2018/2019. “We currently are evaluating a 24-room expansion with minimal interruption to hotel services,” he said. “These opportunities, along with improving operations and customer service by replacing management to Aimbridge Hospitality, are reasons we see this property as a great fit for our fund.”
The Hotel Indigo Sarasota, the deal for which was brokered by Berkadia, is situated off the central West Coast of Florida, with its population increasing over 19% since 2010, according to Culler. “The downtown Sarasota population growth has been more explosive at 34% since 2010,” he said. “The area features over 35 miles of beaches, six islands, is home to spring training for two MLB teams and was rated as the No. 1 place to retire by US News in 2021.”
Repositioning plans are underway to rebrand the property as a voco hotel. “It is IHG’s fastest-growing brand with a flexible approach to signature quality standards and a hosted service style, which will fit in nicely to the selection of other premium-branded hotels in the area,” said Culler. “We also brought in Aimbridge Hospitality to improve and stabilize management of the property, which had seen a pandemic disruption of ownership and operations, leveraging off of Aimbridge’s existing and growing presence in the Sarasota area.”
The company plans to bring the properties back to stabilization within the next one-two years. “We plan to maximize investor returns by selling opportunistically when the market dictates after a three- to five-year holding period,” he said.
The CEO noted that the two acquisitions fit in with the company’s investment strategy. “We target premium-branded, limited-service, extended-stay and compact full-service hotels along with boutique hotels in select markets where Avistone can add value through physical improvements, repositioning, rebranding, change in property management and active asset management,” he said. “We look for hotels that are well located in markets with proven demand that satisfy some or all of the following criteria: business innovation, job growth, population growth, proximity to demand generators and a base of leisure business.”
Culler said that Avistone has a goal of acquiring another three-four hotels by the end of the year, including a third acquisition that is under contract in the Washington, DC, market. “That growth target could be expanded should we choose to partner with other institutional investors in small portfolio acquisitions,” he said.