KATY, TX-After undergoing nearly $2 million of renovations, two Baymont Suites Hotels, totaling 290 rooms, have exchanged hands for close to the $18-million list price. Both assets immediately were re-flagged to Extended Stay Deluxe, a division of Extended Stay America Inc.
One 145-key hotel is located at 15385 Katy Fwy. in the far west submarket and the other one is at 13420 Southwest Fwy. in Sugar Land. Lisa Hankamer, vice president with CB Richard Ellis' office in Houston, tells GlobeSt.com that the New York City-based Lightstone Group ended up with the assets because it knows the market and had ready access to a pool of funds. Additionally, its June acquisition of Extended Stay America Inc. demonstrated “they had a flag to put on and could move quickly,” says Hankamer, who with Bert Stevens, first vice president with CB Richard Ellis' Dallas office, represented Morning View Hotels-Atlantic Pearl Investments of Los Angeles.
Both assets were developed as Hearthside Hotels in 1996. Hankamer says the brand didn't do well and most assets ended up in bankruptcy. She says the Los Angeles seller bought the hotels from bankruptcy court in 2005 with plans to reposition them.
“Then Katrina and Rita came and they ended up being full for a year with hurricane refugees,” Hankamer explains. By the time things got back to normal and renovations were completed, the company strategy had shifted so the decision was made to sell them. At sale time, the average daily room rate was $80 and occupancy 70% for the 2.29-acre Energy Corridor property and $75 per day for the 3.1-acre Sugar Land hotel, which is running at 75% occupancy.
Hankamer says the two Baymont Suites Hotels are Lightstone's first acquisition since it took over the Extended Stay Hotels Inc. brand. “This is setting the stage for a further acquisition strategy throughout the US,” she says, adding the company is very interested in Texas' major markets.
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