Arden Group Adds to its Portfolio in Tampa’s Sizzling Market
- Jan 26, 2015
Arden Group has been slowly but steadily adding to its portfolio over the last couple of years, and the InterContinental Hotel Tampa Westshore in Tampa, is its latest acquisition. The integrated real estate company purchased the 323-key hotel through Arden Real Estate Partners II L.P., its discretionary fund affiliate, from LH Tampa Holding L.L.C., an entity of real estate firm Lowe Enterprises.
Carrying the address of 4860 W. Kennedy Blvd. in the Westshore business district, Intercontinental Tampa is part of the Urban Centre office complex, linked via atriums to Urban Centre I and II. Developed in 1984, the 11-story hotel has had its share of owners as well as names, including the Wyndham Westshore Hotel and the Sheraton Grand. It was during the property’s operation under the latter flag when RenÃ Bardel, vice president of acquisitions and asset management with Arden Group, served as manager of the hotel.
Having spent a decade in Tampa, Bardel knows the head of The Plasencia Group, the firm that marketed the Intercontinental Tampa, very well, and he went directly to owner Lou Plasencia upon discovering that the deal with the winning bidder had gone south.
“I just asked him one day, ‘What’s happening with my property?'” Bardel said.
And the rest is history. Arden plans to invest $7 million on upgrades to Intercontinental Tampa’s guestrooms, and the company has chosen HEI Hotels & Resorts to work with Arden’s asset management team to manage the property.
Arden Group had been eyeing Tampa for eight years. Numbers indicate that Tampa is a wise target. According to a fourth quarter 2014 report by Marcus & Millichap Real Estate Investment Services, Tampa’s hotel market experienced a 6.5 percent increase in demand growth, compared to the national market’s increase of 3.5 percent. The investment community is taking note; during the first half of 2014, transactions in Tampa, along with Jacksonville and Orlando, accounted for more than 60 percent of hotel investment sales in 2014. Per the report, during the six-month period, unrelenting investor demand significantly increased transaction and dollar volume significantly.
“Tampa has very good white-collar job growth, which is key to all of our acquisitions,” Bardel told Commercial Property Executive. “It has diverse demand generators, [the main one being] the corporate business traveler. But there’s also a tremendous amount of leisure demand, being so close and central to the beaches and Busch Gardens in Orlando, so there are demand drivers weekday and weekend, which is very attractive to us.”
The top 26 MSAs and popular resort destinations are also very attractive to Arden Group for hotel acquisitions; although there are exceptions
“We tend to stay away at this time from the markets that are getting a little too heated, like New York and San Francisco,” Bardel added. “New York, with their supply situation and their somewhat weak RevPar growth over the past year–people are paying too much at this time. We’ll catch them on the way down, as we say.”