Institutional Hotel Market Heats Up

RENTON, WA-As part of a $101.5 million four-property portfolio purchase, Marriott International Inc. is reporting the sale of two Washington hotels to Newton, MA-based REIT Hospitality Properties Trust. Included in the package were a 135-room TownePlace Suites and adjacent 114-room Spring Hill Suites at 200 SW 19th Street.

The two other properties included in the deal are a resort on the Island of Kauai in Hawaii and a Courtyard in Calif. At present, Marriott operates more than 2,300 units worldwide. A company spokesperson was not available on deadline to provide specifics of the deal or offer a breakout of prices for the properties.

Christopher E. Burdett, a veep with Colliers International Hotels in Seattle, tells GlobeSt.com Marriott paid $2.9 million for the 5.2-acre site of the two SpringHill and TownePlace properties in 1999. Both properties are less than a year old. Though “stick” or wood-frame construction is not generally considered institutional quality, Burdett says these properties are worthy “because they are new and were developed by Marriott.” Both are extended-stay products, with Spring Hill being the more upscale of the two.

The Colliers hotel man says the second quarter has begun to bustle around Puget Sound’s institutional hotel market. “During the previous 12 to 25 months, institutional, Class A products had been slow to trade,” he says. “But, now we’re seeing more activity.” For one, Burdett says Embassy Suites out of Los Angeles is beginning to circulate some of its properties here.

As well, Burdette says three of Doubletree’s Washington properties being marketed as a portfolio sale of $33.5 million. However, he classifies the asking price as “overpriced for the type of asset.” Supporting his opinion, Burdett says these are not core Double Tree properties, but rather older hotels that had originally been owned by Red Lion, which was purchased by Double Tree (which has itself been folded into the Hilton family of hotel properties). The three now for sale are located in Yakima, Spokane and a small hotel in Bellevue.