"The Sheraton Long Island fits well with the acquisition goals of our partnership fund with Northridge Capital," says John Emery, Interstate's president and COO. "This high-quality, full-service property is located in a strong metropolitan New York submarket with high barriers to entry, surrounded by a number of business and leisure demand generators."
MMLIC completed an $8-million renovation to the hotel in 2000 and 2001, which included all guestrooms, public areas, meeting rooms, FF&E and the building exterior. The six-story hotel is situated directly in front of the Hauppauge Industrial Park, a 14-acre, two million-sf office and industrial park, and is the only full-service hotel near the park. Hotel amenities include an indoor pool, outdoor deck and barbeque area, fitness center, gift shop, full-service restaurant, small cafe and lobby bar and 18,500 sf of meeting space, including a 6,500-sf ballroom, eight meeting rooms and a fixed-seat, tiered theater.
An Interstate spokesperson tells GlobeSt.com that the company was not targeting the Long Island area in particular, the Sheraton just happened to meet the criteria the fund had established.
And the fund has no intention of stopping with just one. "We believe that we are at or near a bottom of the hotel real estate cycle, and we are actively seeking other appropriate acquisition candidates. Currently, we have a number of other properties in the pipeline," explains David Jackson, Northridge Capital's president. "Hotel acquisition, primarily through joint ventures, is one of our principal growth strategies," adds Emery.
The joint venture is funded with approximately 50% equity and the balance in secured debt. Northridge will contribute up to $45 million of the equity, Interstate up to $5 million, and up to $150 million will come from other outside investors.
Established in 1997, Northridge is a Washington DC-based asset management firm responsible for managing the investment assets of private investors. Interstate, based in Arlington, VA, operates more than 380 hospitality properties with nearly 82,000 rooms in 44 states, the District of Columbia, Canada and Russia, including 55 properties managed by Flagstone Hospitality Management, a subsidiary of Interstate Hotels & Resorts.
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