RLJ Acquires Denver Hotel in $35.5M Off-Market Deal
The building was transformed from an office space.
RLJ Lodging Trust has acquired a hotel a Denver, Colorado for $35.5 million.
Hotel Teatro features 110 rooms and is located at 1100 14th Street. The original building, first constructed in 1911, was designed as an office space. Then it was transformed into a “boutique lifestyle hotel,” according to RLJ.
Some amenities include a fitness center, business area, meeting rooms, and electric vehicle charging.
The real estate investment trust said that Hotel Teatro scores demand thanks to its location being nearby to the Colorado Convention Center and the Denver Performing Arts Complex. Also, it’s close to Union Station and sports venues such as Ball Arena and Coors Field. Plus, it benefits every day from leisure, small group conventions, and corporate segments, the Maryland-based firm said.
This isn’t the first hotel that RLJ purchased in Denver. In 2022, the firm acquired Moxy Denver Cherry Creek for $51.3 million.
“We are pleased to expand our footprint in Denver by acquiring this unique boutique lifestyle hotel located in a prime location within Denver, in an off-market deal,” Leslie D. Hale, president and CEO of RLJ, said in a statement regarding Hotel Teatro.
“The acquisition of this high-quality hotel further increases our mix of lifestyle properties in urban locations that benefit from seven-day-a-week demand. The acquisition price represents a significant discount to recent trades and replacement cost, validating our team’s capabilities and our advantage as an all-cash buyer to source high-quality acquisitions in this environment.”
Additionally, RLJ touted Denver’s growing area as a whole. Population growth, coupled with booming sectors such as financial services, bioscience, and technology – has made the metro area an attractive investment. In 2023, Denver by event platform Cvent was deemed a top 10 meeting destination in North America, as cited by RLJ.
RLJ expects Hotel Teatro to benefit from 16th Street Mall and Larimer Square thanks to renovation. It also anticipates generating more than a 10 percent stabilized yield from the property.
Sage Hospitality Group, the largest hotel operator in Denver, will manage Hotel Teatro.