News
Hotel Bonanza
July 12, 2012
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| Earlier this week, Pebblebrook CFO Ray Martz told us his firm bought the Hotel Vintage Park ($32.5M) and Hotel Vintage Plaza in Portland ($30.5M) from a pair of private equity firms at a 25% to 35% discount to replacement cost. (Must've been a summer sale on hospitality, or maybe a Groupon.) There's opportunity in cash flows, which are 25% to 30% below their peaks, while occupancy rates on both hotels are well above market averages. (And no new supply expected in Portland or Seattle for several years.) |
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| For the past year, Seattle has had 75% occupancy (beating the April '07 peak and coming just shy of the December '95 peak). The 124-room Hotel Vintage Park finished the year at 88%. Ray also says Seattle RevPAR has grown 11% YTD, making it one of the strongest urban markets. Built in 1922 and converted to a hotel 20 years ago by Kimpton, it'll get some room and common area work done in 2014. (Not quite what sci-fi enthusiasts in 1922 thought would be built in 2014, but it'll do.) It's also one block from the REIT's Hotel Monaco, also managed by Kimpton. Also likely to be on the block soon is the Seattle Hilton, as owner R.C. Hedreen Co shifts its focus to developing the block that houses the Greyhound Station, perhaps with a hotel project. Hilton's employees have been warned that they may be laid off at the end of the summer. |
