HOUSTON-Inland American Lodging Group Inc. (IALG) has purchased a portfolio of four Marriott-branded hotels totaling 598 rooms for $80 million. The properties, located in Florida, Iowa and Pennsylvania, were sold by local owner Moody National Cos.
The portfolio contains: Courtyard Pittsburgh Downtown, a 182-room property in Pittsburgh, PA; Courtyard Pittsburgh West Homestead, a 94-room property also in Pittsburgh, PA; Courtyard West Palm Beach Airport, a 103-room property in West Palm, FL; and Marriott West Des Moines, a 219-room property in Des Moines, IA.
Thomas McGuinness, CEO of Oak Brook, IL-based Inland American Real Estate Trust Inc., says acquisitions like this deal will continue. “Companies are worried about brand loyalty,” he tells GlobeSt. “If an owner doesn’t have the capital resources to keep up a property, they threaten to pull the flag.”
McGuinness says in these types of acquisitions, Inland will step in to buy the properties and contribute funds to “bring the brand back up.” Additionally, the cash flow is guaranteed by the brand until improvements are complete, he notes.
“If we can buy like this at the beginning of the recovery and get favorable returns, why not?,” McGuinness says.
IALG, also located in Oak Brook, IL, is a wholly owned subsidiary of Inland American Real Estate Trust Inc. Following this acquisition, Inland American Real Estate Trust has 15,584 hotel rooms, including 54 hotels under the Marriott brand.
The Marriott-branded hotels will continue to be managed by Concord Hospitality Enterprises, which has existing management contracts that were extended to run through 2020.
They sustained moderate rate and occupancy declines compared to the national average, throughout the economic downturn, according to Marcel Verbaas, president and CEO of IALG. “We believe they are well-positioned for growth as the economy recovers and business and leisure travel return to more normalized levels,” he says. “Targeted capital expenditures will further enhance these hotels during Inland American’s first few years of ownership.”
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