The portfolio has a total of 986 rooms and includes Holiday Inn, Holiday Inn Express, Holiday Inn Express Hotel & Suites and Hilton Garden Inn brands. The hotels are in Minnesota, Kansas, Texas and North Dakota, says Al Calhoun, a managing director for Jones Lang LaSalle Hotels. The cap rate was in the "high 8's," Calhoun tells GlobeSt.com.
Jones Lang LaSalle Hotels, based in Chicago, represented the seller in the transaction. Dakota Hospitality had owned Holiday Inn, 3803 13th Ave. South, Fargo, ND; Holiday Inn Express, 1040 40th St. South, Fargo, ND; Holiday Inn Express Hotel & Suites, 10985 Red Circle Dr., Minnetonka, MN; Holiday Inn Express Hotel & Suites, 4609 City Lake Blvd., Fort Worth, TX; Holiday Inn Express Hotel & Suites, 309 State Hwy. 114 West, Grapevine, TX; Hilton Garden Inn, 4400 North Freeway, Fort Worth, TX; Hilton Garden Inn, 6330 Point Chase, Eden Prairie, MN; and Hilton Garden Inn, 5800 College Blvd., Overland Park, KS, according to Dakota Hospitality's website. "The properties each had different sets of partners and the properties had met the partners' objectives when the partnerships were set up," Calhoun says.
The partnership of PGPW and First Call Hotels acquired the portfolio because "They are in a growth mode," Calhoun says. The partnership also was interested in acquiring the hotels because they have increasing average daily rates, high occupancy rates and above average revenue per available room for their brands.
The majority of the buildings were constructed 10 years ago with the exception of Holiday Inn in Fargo, which is older, Calhoun says. Some upgrades are expected to be completed, but "all of the properties generally are in good to excellent condition," he says. One of the interesting things about the transaction is that it was under contract prior to the "capital crash," according to Calhoun. "This will probably be the first major select service portfolio that closed past the capital crunch," he says. "We were able to do that due to quality assets and the quality of the buyer and the seller."
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