Chesapeake Lodging to Buy 613-Room Denver Marriott for $119M
- Aug 26, 2011
August 26, 2011
By Barbra Murray, Contributing Editor
Chesapeake Lodging Trust’s shopping fever continues as the REIT enters into an agreement to acquire the Denver Marriott City Center, the 613-room upper-upscale hotel in the mixed-use City Center tower in downtown Denver. Chesapeake will acquire the asset from WTCC City Center Investors V L.L.C., an affiliate of Walton Street Capital, for $118 million.
The Denver Marriott last changed hands in 2007 when Walton acquired it as part of a $620 million portfolio purchase from Crescent Real Estate Equities L.P.
Located at 1701 California St., the hotel occupies the first 20 floors of the 43-story, 1 million-square-foot City Center building, which also encompasses office space and carries the title of the largest mixed-use building in Denver. The hotel currently features 28,000 square feet of meeting space; however, Chesapeake’s planned renovation of the property will result in the expansion of the meeting space to 32,500 square feet.
The purchase of the Denver Marriott will mark Chesapeake’s entrée into the city. The REIT plans to continue the management agreement that is currently in place with Marriott International Inc. Presently, the property holds the distinction of being the only full-service Marriott in downtown Denver.
Chesapeake has been digging into its pockets and making purchase after purchase across the country for the last few months. In May, the REIT completed the $53 million acquisition of the 195-room Homewood Suites Seattle Convention Center and the $128.8 million acquisition of the 368-room W Chicago-City Center. Those transactions were followed in June by the $55.5 million purchase of the 210-room Hotel Indigo San Diego Gaslamp Quarter and the $68 million acquisition of the 204-room Courtyard Washington Capitol Hill/Navy Yard in Washington, D.C. And in July, the REIT bought San Francisco’s 171-room Hotel Adagio for $42.25 million.
The Denver Marriott transaction is on track to close within the next 30 days, with Chesapeake relying on cash on hand and borrowings under its revolving credit facility to finance the acquisition.
But that certainly will not be the last of the deals this year, not by a longshot. “We expect a very active remainder of 2011 and 2012 for our company,” James L. Francis, Chesapeake president and CEO, stated during the company second quarter earnings call in August. “We continue to focus predominantly on upper upscale branded hotels, so boutiques will continue to be source on our pipeline where we believe it makes sense like the Adagio in San Francisco. And geographically we continue our focus on the top 15 to 20 markets.”
He added, “Given our track record and relationships, we feel very strongly that we can continue to add assets to our balance sheets in a prudent fashion.”