In this deal, Interstate will hold 15% ownership; a structure the company sometimes takes depending on the transaction, Leslie Ng, Interstate's chief investment officer, tells GlobeSt.com. "We've done business with the Meisel family before and we like them. Also, part of our strategic plan is to diversify our earnings base working with capital partners in joint ventures."
Interstate's share of the acquisition is $750,000, which includes a portion of the $1.5-million renovation that the new owners are planning. Interstate has operated this property since 1998. When it closed on its ownership, it also executed a new long-term management agreement.
This is Interstate's first acquisition in Baltimore, Ng says. Located at 5100 Falls Rd., it is approximately six miles from Downtown Baltimore. The hotel is part of the Village of Cross Keys, a mixed-used development that includes several boutique retail shops and specialty stores, as well as office space.
Ng says, one reason Interstate and Meisel selected Radisson Hotel Cross Keys as a target acquisition was its position in the Baltimore market. Market research shows that minimal new supply will be entering the market for the next three years. Also, this is the only full-service hotel within a five-mile radius. Some ways the companies might add value to its new hotel include upgrading the food & beverage operation to take advantage of the hotel's location in the Village of Cross Keys.
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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.
