SEATTLE-Lowe Enterprises Investors has completed the $71 million acquisition of the 297-room Red Lion Hotel on at 1415 Fifth Ave. from Red Lion Hotels Corp. Brad Howe, CEO of LEI, called the deal an "opportunity to acquire a good property in an urban market that we know well."
Howe noted that LEI and its affiliates "have made numerous office, hotel and resort investments in the Pacific Northwest for decades." The Red Lion Hotel, he said, "has an unparalleled Downtown Seattle location and recent renovations to the guest rooms and common areas have upgraded the quality of the property. We will undertake further property renovations and institute new guest, meeting and events programs that will further enhance the value of the property.”
The Red Lion Hotel is in the city's primary business district with abundant nearby amenities, including shopping, dining and entertainment, and major attractions including Pike’s Place Market and the Convention Center. At closing, LEI entered into a franchise agreement with Red Lion Hotels Franchising Inc. to continue to operate the property as a Red Lion hotel, managed by LEI affiliate Destination Hotels & Resorts. Red Lion Hotels Corp. also entered into an affiliation agreement with a subsidiary of Destination Hotels & Resorts to facilitate the cross-promotion of hotels between the companies.
“This transaction is very positive for Red Lion. It allows the Red Lion brand to continue on a flagship hotel in downtown Seattle and allows us to deploy the hotel’s equity to recapitalize our balance sheet and reinvest in our hotels and brand,” said Jon E. Eliassen, president and CEOf Red Lion Hotels Corp.
The additional property renovations that LEI will undertake will include a multi-year capital improvement program, initially focusing on common areas and existing meeting space. Later plans include the addition of up to 22 guest rooms on floors three through five on the Fifth Avenue side of the hotel and 10,000 square feet of modern, high-quality meeting space creating a total of 25,000 square feet of meeting space.
The fourth floor of the hotel is currently vacant which creates the opportunity to build-out that floor and reconfigure existing space. Along with the new guest rooms, a new 2,000-square-foot state-of-the-art fitness center will be developed to replace the existing facility on the hotel’s fifth floor.
Charlie Peck, president of Destination Hotels & Resorts, pointed out that the improvements will create the opportunity to increase revenue and that, under Destination Hotels & Resorts’ management, the hotel’s restaurants and lounge areas also will be modified to take better advantage of the hotel’s views and outdoor spaces. The hotel offers one of the largest outdoor patios at the Terrace Gardens and Lounge on the Fifth floor, with views of Puget Sound. Chris Burdett of CBRE Hotels in Seattle represented Red Lion in the sale.
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