"The Philadelphia market is really strong but doesn't really have any true boutique hotels at this time," Holden Lim, senior director at Cushman & Wakefield Sonnenblick Goldman, tells GlobeSt.com. "So it makes sense for them to look at that market. Their goal is to expand their geographic reach to places they aren't in."
Kimpton has a history of transforming buildings into one-of-a-kind hotels. The VU Hotel used to an old printing factory on the Far West Side of Manhattan and the Hotel Monaco in Baltimore formerly was the headquarters for the Baltimore and Ohio Railroad in the 1900s. The Architect's Building was completed in 1929 to serve as the headquarters for the local chapter of the American Institute of Architects.
"This is what they do and this is what they're good at. The way Kimpton increases their portfolio is they buy these older and historic buildings. They're very good at these adaptive reuses," Lim says. "They basically get their construction team in there. They have a pretty big in-house construction team, and they go through the building and come up with ideas for the hotel."
Lim helped Kimpton find financing in Salt Lake City when the company turned an old bank into the Hotel Monaco. "It's very tough to find construction finances these days. Kimpton, as a developer, they don't have the same reach with lenders than we do," says Lim. "In this kind of changing market, almost every day it seems numbers change. It's such a dynamic market right now, it makes sense for a lot of companies to hire an intermediary company like us to help them."
Greg Wolkom, CFO of Kimpton, says in a statement that "we appreciate Wachovia's confidence in Kimpton at a time when the financing markets are particularly challenging. Kimpton's ability to raise debt and equity capital in the current capital constrained market is further evidence of our market leading position in the boutique and lifestyle hotel segment."
The future hotel sits on 117 S. 17th St. in the Rittenhouse Square. Hotel Palomar will feature 230 rooms, 6,500 sf of meeting space, a 650-sf fitness center, a restaurant and a bar.
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