The Dallas-based Wyndham gets a long-term management contract and the Annapolis, MD-based Thayer gets 1,211 rooms in four key markets--Peachtree City, GA, Lisle, IL, Miami and Colorado Springs. At the end of the day, the deal weds manager and owner in a quid pro quo alliance. "We are very much looking forward to a long and mutually beneficial relationship with Thayer Lodging," Matt Sparks, Wyndham's vice president of development, tells GlobeSt.com. "I expect we will be working on many other acquisitions between us...in the Wyndham assets or assets that Thayer may bring into the Wyndham-brand portfolio. We are likely to have other JVs with Thayer going forward."
Sparks says talks have been ongoing for some time about the assets and a way to combine forces. The four hotels were carved from a 32-property "for sale" roster announced in August in Wyndham's ongoing sell-off to transition from owner to manager of select properties. "We were very interested in keeping the Wyndham brand (on the hotels)," Sparks says, "and the assets also fit into Thayer's strategy." For yesterday's story, click here.
The deeds will pass in October, opening the door to a $27.5-million renovation under Wyndham's watch. Sparks says the extent of the work, possibly some expansions, will be decided in the coming weeks, but the tentative plan calls for renovations of all rooms and fresh soft goods.
Wyndham bought the hotels in 1998 in several portfolio acquisitions. The 250-room Wyndham Peachtree Hotel & Conference Center at 2443 Highway 54 West opened in 1984 and has evolved into a market leader for the southwest Atlanta market, Sparks explains of the reasoning behind the hold strategy. The 242-room Wyndham Lisle at 3000 Warrenville Rd. opened doors in 1986 in an upscale suburb northwest of Chicago while the 311-room Wyndham Colorado Springs, which opened in 1988 at 5580 Tech Center Dr., is near the US Air Force Academy in the state's second-largest city and part of three-property key portfolio in the Denver metro. The 408-room Wyndham Miami Airport opened in 1976 at 3900 NW 21st St. and expanded in 1981 by another146 rooms and a parking garage. Thayer Hotel Investors III LP will acquire the Peachtree City property and Thayer Hotel Investors IV LP will purchase the remaining three.
Wyndham, holding contracts for two more sales, has 26 hotels left to sell. In the fourth quarter, the Dallas-based Lone Star Funds will buy seven hotels. Wyndham has realized $499.2 million in gross proceeds from 29 hotel sales to date. The gain is being used to reduce debt and overall leverage while helping to secure a refinancing of corporate credit facilities that mature in April 2006.
According to yesterday's press release, the debt reduction "will allow Wyndham to invest in its remaining owned assets through high return-investment projects and potentially access capital for growth moving forward, including brand expansion in markets like San Francisco, Seattle, Hawaii and New York City, where it recently gained the right to use the name after settling a longstanding lawsuit."
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