DENVER — Carey Watermark Investors Inc. (CWI) has acquired the 302-room, dual-branded Hampton Inn & Suites/Homewood Suites by Hilton at the Denver Downtown-Convention Center for $81.5 million from Englewood, Colo.-based Stonebridge Cos. The hotel is located at 550 15th St. in the heart of Denver’s central business district (CBD).
CWI’s total investment in the property is approximately $85 million, which includes the $81.5 million purchase plus acquisition-related costs and planned capital expenditures. The acquisition was financed with $53 million of debt.
The Hampton Inn & Suites and Homewood Suites brands represent Hilton Worldwide’s upper mid-scale select-service and upscale extended-stay brands.
Opened in 2013, the building is an adaptive re-use redevelopment of a 1960s-era office building. As a result, the dual-branded hotel affords more open expansive lobby areas and larger guestrooms and public spaces compared to the select-service hotel supply in the market, according to CWI officials.
Primary demand generators include major corporations and businesses within the CBD, the Colorado Convention Center and Denver’s major leisure attractions, including the 16th Street Mall, Coors Field and Pepsi Center. Since 2003, the CBD has benefitted from approximately $4.6 billion of public and private sector investment.
The 302 rooms include 120 Hampton Inn & Suites and 182 Homewood Suites housed in 12 stories. Hotel amenities include 7,000 square feet of meeting space, two distinct lobbies and receptions desks, an outdoor patio, fitness and business centers, indoor pool and whirlpool and complimentary wireless Internet access.
“The acquisition represented the opportunity to invest in a newly redeveloped, quality dual-branded hotel with strong brand affiliations in a strong domestic market,” says Michael Medzigian, CEO of New York-based CWI. “Given these attributes, we believe that the investment will be a solid cash flow-generating addition to our growing portfolio.”
The hotel fundamentals in Denver, like much of the country, are strong. In 2013, average hotel revenue per available room (RevPAR) in the greater Denver area increased by 8.6 percent on a year-over-year basis. The occupancy rate and average daily rate increase during the same period by 5.7 percent and 2.7 percent, respectively.
Strengthening market fundamentals combined with Denver’s status as a leading destination for corporate, group and leisure visitors have positioned the Mile High City’s hotel market well for 2014, according to CWI. In addition, a revitalized downtown core has made Denver’s CBD the cultural, entertainment and business hub of the metropolitan area, attracting residents, visitors and companies and hosting more than 13 million visitors each year.
CWI is a publicly registered, non-traded real estate investment trust formed to make investments primarily in the lodging and lodging-related sectors. Affiliates of W. P. Carey Inc. and Watermark Capital Partners advise CWI and manage its overall portfolio.
— Matt Valley