Interstate Hotels Buys 329-Room Hilton for $29M

CONCOD, CA-Interstate Hotels & Resorts is the new owner of the 329-room Hilton Concord. The publicly traded hotel management company from Arlington, VA, acquired the property from Newport Beach, CA-based Hanford Hotels Inc. The purchase price was $88,600 per room, which translates to slightly more than $29.1 million. The company funded the acquisition with a combination of cash, borrowings under the company’s secured line of credit and a $19-million first mortgage loan from Massachusetts Mutual Life Insurance Company. The loan has an initial term of three years with two one-year extension options. The 11-story Hilton Concord is situated on 7.4 acres at 1970 Diamond Blvd., off of I-680 and Willow Pass Road. The building has 15,600 sf of meeting, banquet and pre-function space, including the largest hotel ballroom in the local market. The property features an open-air courtyard with an outdoor heated swimming pool and whirlpool. The hotel’s foodservice options include the Grissini Trattoria and Wine Bar and a 45-seat lobby lounge located adjacent to a courtyard that provides additional outdoor seating.Interstate CEO Steve Jorns was not available Monday for comment. In a prepared statement, he says the company has been reviewing a number of hotel acquisitions opportunities as part of the company’s ongoing strategy to diversify its earnings base. The Concord property fit the company’s target profile by being a full-service hotel in a top-50 MSA that has between 200- and 500 rooms and operates under the Hilton, Marriott or Starwood brand.Of the 300 hotels it operates, Interstate now owns two of them and has ownership interests in another 25. “We purchased this hotel with the intent of either retaining full ownership or transferring ownership to a joint venture or investment fund,” says Jorns. “We believe there is a window of opportunity to acquire and strategically invest in this phase of the real estate cycle. With this first acquisition consummated, we expect to accelerate our efforts.”