"This marks the first acquisition of our third investment fund, the $515-million HEI Hospitality Fund III LP, which was raised in early 2008," executive vice president of acquisitions Steve Mendell tells GlobeSt.com. "We will continue to seek top-branded hotels in markets with barriers to new entry that we can acquire at below-replacement cost and which will benefit from improved operations," he says, adding that the Hanover Marriott is representative of the type of assets being targeted for Fund III.
Located at 1401 Route 10 E. in Morris County, the hotel is less than 30 minutes from New York City and is surrounded by more than 12 million square feet of office space. Guestrooms include Marriott's signature Revive Collection, well-lit work desk with high-speed Internet access and bathrooms with granite vanity tops.
Additionally, the hotel provides 22 meeting rooms aggregating 18,850 square feet of meeting space, including the largest Grand Ballroom in Morris County, accommodating up to 1,000 guests. The hotel also offers Allie's, a three-meal restaurant; full-service business center; indoor/outdoor pool; on-site fitness center; and outdoor picnic/BBQ area. In addition, the Auld Shebeen pub, which was flown in from Ireland and re-constructed in the hotel by local artisans, serves authentic Irish cuisine.
"We believe this purchase demonstrates the loosening of the hotel acquisition market," adds Roger Clark, HEI's senior vice president of acquisitions and development. "With approximately $500 million of equity in our fully discretionary fund, we intend to be in the vanguard of this wave, surfacing deals that make sense for our investment plans."
Clark tells GlobeSt.com that HEI has a number of hotels in its pipeline, and expects to acquire between $1 billion and $1.5 billion in hotels and resorts in the coming years.
The renovation, which equates to an investment of nearly $57,000 per room, will focus on all aspects of the hotel, including the lobby, guestrooms and meeting space. The entrance area will be transformed into Marriott's new Great Room concept, which is designed specifically for the 24/7 work patterns of business travelers today. The concept breaks the hotel public space into separate areas for work and socializing in group and individual spaces, while simultaneously linking them together with a cohesive feel.
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