Recent transactions include Procaccianti Companies acquiring three Florida Keys properties; Sunstone Hotel Investors completing the sale of two Chicago hotels; and JLL Capital Markets arranging acquisition financing for a California inn.
Procaccianti Companies acquire three Florida Keys properties
As mentioned in the February issue of Hotel Business, Procaccianti Companies have acquired three independent resort properties located in the Florida Keys, Parmer’s Resort & Marina located on Little Torch Key and the Hadley House and Fisher Inn Resort & Marina, both located in Islamorada. The properties will be managed by Procaccianti’s hospitality management affiliate, TPG Hotels, Resorts & Marinas.
“The acquisition of these properties in the Florida Keys aligns perfectly with our strategic growth plan in the upscale boutique, independent and marina space,” said Rob Leven, chief investment officer, Procaccianti Companies. “The Florida Keys are among the top-performing leisure markets in the United States with tremendously high barriers to entry which make them strong real estate investment opportunities.”
The Fisher Inn Resort & Marina (pictured above) has 37 guestrooms, of which 15 were newly constructed in 2020. The property also features an outdoor pool and a marina. Similarly, the Hadley House is home to 37 guestrooms, a marina and an outdoor pool. The acquisition also includes an additional residential parcel for future development.
Parmer’s Resort & Marina on Little Torch Key is made up of a collection of cottages, suites, efficiency studios and rooms spread over five acres in between a protected canal and the open water of Pine Channel in the Lower Florida Keys. Parmer’s Resort is less than 25 miles from Key West but close to the beaches of Bahia Honda State Park and the diving at Looe Key Reef.
“With their built-in demand drivers, combined with our institutional management platform, we see exceptional opportunities for revenue growth and value creation as business and leisure travel further stabilizes in the wake of the pandemic,” said Mike Marshall, president/CEO, TPG Hotels, Resorts & Marinas.
Sunstone completes disposition of two Chicago hotels
Sunstone Hotel Investors Inc. has completed the sale of the 368-room Embassy Suites Chicago and the 361-room Hilton Garden Inn Chicago Downtown/Magnificent Mile.
The Chicago hotels were sold for a combined gross sale price of $129.5 million, or $178,000 per key, which represents a 9.8x multiple on 2019 hotel adjusted EBITDAre and an 8.8% cap rate on 2019 hotel net operating income. The properties generated an IRR of approximately 9% for the company over the life of the investment. Sunstone anticipates that the hotels will generate a combined first-quarter 2022 net loss before any gain on sale of $3.1 million to $3.6 million and a hotel adjusted EBITDAre loss of approximately $2.0 million to $2.5 million through the date of sale.
“We are pleased to announce the sale of these two hotels as it marks our exit from the Chicago market, which has been hindered by excess supply and an inability to drive meaningful rate and profitability growth,” said Bryan Giglia, CEO. “We expect to recycle the proceeds into higher growth and greater per-share NAV enhancing investments. With these sales, we have now largely completed our non-core disposition program and we are actively looking to grow the portfolio through the addition of long-term relevant real estate.”
JLL Capital Markets arranges acquisition financing for Blue Lantern Inn
JLL Capital Markets has closed $9.5 million in acquisition financing for the Blue Lantern Inn, a 29-key, luxury boutique hotel in Dana Point, CA.
JLL worked on behalf of the borrower, Ocean Lodging, to secure the 10-year loan through a commercial bank.
The JLL Capital Markets Debt Advisory team representing the borrower was led by Aldon Cole, senior managing director, and Jack Piegza, analyst.