Ashford Trust Claims Piece of Minneapolis History
- Jun 27, 2015
By Ioana Neamt, Associate Editor
An out-of-state investor has scored a major hotel deal in Minneapolis. A mere week after shelling out $224 million for a nine-hotel portfolio, Ashford Hospitality Trust has now set its eyes on the City of Lakes.
The Dallas-based REIT has entered into a definitive agreement to acquire two iconic hotels in Minneapolis, Le Meridien Chambers Minneapolis and the W Minneapolis Hotel – The Foshay. According to a news release, the price tag for the two assets amounts to a whopping $101 million in cash. Ashford will also assume a $56 million mortgage debt on the W Minneapolis hotel that matures in May 2023.
Monty Bennett, chairman & CEO of Ashford Hospitality Trust, stated that the acquisition of the two well-located Minneapolis hotels is an exceptional opportunity in a market “which is experiencing strong RevPAR growth.” Bennett predicts the hotels are set to achieve further increases in RevPAR, given “the expansion of demand drivers, including the highly anticipated addition of the New Minnesota Stadium, which is expected to open in 2016.”
The $101 million price tag is due to a trailing 12-month cap rate of 6 percent on NOI and an estimated forward 12-month 12.5x EBITDA multiple. On a trailing 12-month basis, the W Minneapolis achieved RevPAR of $166.84, while Le Meridien Chambers achieved RevPAR of $171. Post-closing, the hotels will continue to be managed by Starwood Hotels & Resorts Worldwide Inc.
The 229-key W Minneapolis Hotel carries a rich history within its walls. The Foshay Tower was the first skyscraper to be built in the state and was Minneapolis’ tallest building from 1929 to 1971. The tower reopened under the W Hotels brand in 2008, following a $90 million restoration.
Le Meridien Chambers Minneapolis is an art-focused, 60-room hotel located in a landmark revival building. The asset is within walking distance of the Walker Art Center and about a mile away from the Guthrie Theater.
Images courtesy of Starwood Hotels & Resorts