The Chartres Lodging Group LLC has sold the Radisson Blu hotel in downtown Minneapolis for more than twice the amount it paid for the 360-room hotel in 2013.
Newton, MA-based Hospitality Properties Trust (HPT) bought the hospitality property at 35 S. Seventh St. for $75 million, or about $208,000 per door, in an off-market transaction, Chartres’ senior analyst Greg Morgan said on Tuesday. The sale was announced Monday by Radisson Hotel Group, a Minnetonka company owned by Chinese giant HNA, which called the trust a “longtime partner.”
On a recent buying spree, HPT has spent $59 million in acquisitions in 2017 alone, adding 20 hotels and one travel center to its portfolio.
San Francisco-based Chartres bought the hotel back in April 2013 for just $28.88 million, or about $80,000 per room, from Carlson Real Estate Services LLC, according to CoStar data. The company invested millions into renovating the building, then known as the Radisson Plaza. Morgan declined to give an exact figure as to how much the work cost, but described it as a top-to-bottom refresh of the rooms and common areas.
See CoStar COMPS #2722090.
“It was very dated when we acquired it,” he said.
In 2014, it was rebranded as a Radisson Blu. The hotel includes 29,000 square feet of meeting and event space, a 24-hour business center and the FireLake Grill House & Cocktail Bar.
Morgan said the timing of the sale was in keeping with Chartres’ strategy. Typically, the company buys a full-service hotel in a major metro area, fixes it up, and holds the property for just three to five years. With the Radisson Blu off its books, it no longer has property in Minnesota, though Chartres would buy here again if the right opportunity came up, Morgan said.
For its part, the downtown hotel will bring HPT’s commercial holdings in Minnesota to six. The trust also owns Country Inn & Suites in Brooklyn Center, a Courtyard by Marriott in Eden Prairie, a Sonesta ES Suites in Eagan, Candlewood Suites in Richfield and a TA travel center in Rogers.
In September 2017, HPT sold the 209-room Park Plaza in Bloomington to an entity tied to Eagan-based JR Hospitality, which paid $8.5 million for the hotel.
Radisson Hotel Group Spokesperson Laura Langemo said HPT has no plans to update or alter its newest acquisition, but did announce that it would put more than $50 million into renovating eight other hotels in its portfolio, including the Brooklyn Center Country Inn. Work is already under way on the Country Inn hotels, and should done by the third quarter of 2018.
As of March 31, HPT owned 323 hotels and 199 travel centers spread across 45 states, Canada and Puerto Rico, with a total of 49,902 rooms in all, according to June 15 investor presentation.
The 16-story, 368,243-square-foot Radisson Blu was originally constructed in 1986 on four-tenths of an acre in the city’s CBD, making up the lower floors of the 36-story PwC Plaza office tower, which is located in Plaza VII, a multi-use development which includes the hotel, a retail and conference center, a 19-story office tower and a 315-stall underground parking garage.
Please see CoStar COMPS #4302125 for additional information on this latest transaction.
