David Butchello, an agent with Sperry Van Ness, says eight offers came in for the 3032 Richmond Rd. property developed by Phillip Richardson Inc. At the end of the day, Butchello and Sperry Van Ness colleague Jim Tucker secured 97% of the list price for the local seller.
In general, the hospitality sector in Williamsburg as well as nearby Jamestown and Yorktown are experiencing a resurgence, Butchello tells GlobeSt.com, with most hotels trading in the 8% to 8.5% range. "These three towns make up the historic triangle in Virginia. They are all experiencing momentum now since it is the 400th anniversary of Jamestown."
Another Holiday Inn in Williamsburg located close to the Patriot at 814 Capital Landing Rd., for instance, recently sold for $4.7 million, Butchello says. It had 139 rooms and its banquet and meeting space is less than half that of the Patriot's, which offers 10,000 sf of event space, the largest in the area. The Patriot is positioned within minutes of Colonial Williamsburg, Busch Gardens and WaterCountry USA.
With a population of 14,000, Williamsburg is largely a tourist-based economy so the local hotel industry experiences fluctuations in the real estate cycle more acutely than most cities. Normally there is a 50% occupancy rate of the 10,000-room supply in the town. There also is new supply in the pipeline. Butchello says a 96-room Holiday Inn & Suites is going up along Bypass Road and a 109-room Hampton Inn Suite is under construction along Capital Landing Road. However, some supply has been taken out of the market in the past year through a few time share developments. "There is always a strong back and forth in the supply and demand equation in this market," he says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
