Laurus Acquires Two Hilton Airport Hotels in One Week
- Dec 27, 2012
Laurus Corp., a private real estate investment and development firm, has acquired the Hilton Kansas City Airport hotel in Kansas City, Mo., its fifth hotel this year and the second in less than a week. A few days earlier, the company had closed on the Hilton San Antonio Airport Hotel in San Antonio, Texas.
The Los Angeles-based firm has made six acquisitions this year, five of them hotels and all of them located near major metropolitan airports. The firm’s sixth acquisition was a three-story, Class A office building in the Southpointe Business Park near Pittsburgh that was purchased in September.
“This is Laurus’ second closing on a Hilton property in the past week and completes our sixth acquisition for 2012,” said Andres Szita, chairman and co-founder of Laurus. “Both the Hiltons offer investors quality full-service hotels in markets that have experienced significant RevPar growth over the past 12 months.”
“The recognizable strength of the Hilton brand and its reservation system adds credibility and liquidity avenues for both properties, and implemented operational efficiencies will position the hotels for a strong and stable return for investors” said Philip Cyburt, CEO.
The purchase prices were not disclosed. Laurus Corp. officials could not be reached for more information on the acquisition costs.
Cyburt said both purchases were made with a capital allocation from the company’s Ethika Fund. Laurus partnered with Lowe Enterprise Investors for instutional capital for both the Kansas City and San Antonio hotels. Cyburt noted that the instutional capital from Lowe on the Kansas City hotel came from a separate account investment managed on behalf of Ohio PERS. The San Antonio purchase also used institutional capital from NXT Capital L.L.C.
The Kansas City hotel has 347 guest rooms and suites and 21,000 square feet of meeting space. It is located on Interstate 29 and less than five minutes from the Kansas City International Airport. The hotel has more than 6 million square feet of office space surrounding it, including General Motors, Ford Motors, Harley-Davidson, Toyota and Sony. Major attractions are nearby including the NASCAR track at the Kansas City Speedway and Kansas City Zoo.
“The Kansas City market features robust demand drivers and various value-add opportunities through renovation, operation efficiencies and management,” said Jean Paul Szita, president and CFO.
He said the company was planning an $8 million renovation of the property at 8801 NW 112th St., including modernizing the restaurant, lobby, restaurant and bar. Guest rooms, meeting space and common areas will also be revamped.
The firm plans to spend about $9 million at the San Antonio hotel, located at 611 Northwest Loop 410. The hotel will get a total upgrade including rooms and common areas. The 14-story hotel has 384 guest rooms and 16,000 square feet of meeting space.
“The hotel’s amenities, including the large flexible event space, are ideal for its dominant position in this submarket,” said CIO Austin Khan. “The hotel captures a large share of demand, but we believe that revenue can be further increased through our expansive renovation program.”
Located on 3.7 acres, it is near high-end residences, more than 10.5 million square feet of office space and the North Star mall, a major regional shopping center and a top tourist attraction in the city along with the River Walk and Alamo. The hotel is about eight miles from downtown San Antonio and less than two miles from the San Antonio International Airport.
“The Hilton hotel acquisition aligns with our opportunistic investment strategy of acquiring real estate at a good basis located in growth markets with dynamic job centers in regions that have historically responded to the economic recovery well above the national average,” Cyburt said of the San Antonio purchase.
Earlier this month, Laurus acquired the Sofitel Miami Hotel, a 14-story luxury property with 281 rooms and 17,351 square feet of meeting space. The 10-acre site includes 1.3 acres that could be used for future development of a Class A office building or an additional 100 rooms. Located at 5800 Blue Lagoon Drive, the hotel is adjacent to Miami International Airport and the Waterford Business Park. Laurus plans $4.5 million in upgrades at that hotel.
In July, the firm purchased the Hilton Salt Lake City at Salt Lake City International Airport, a 288-room full-service hotel that is adjacent to Interstate 80 and the Salt Lake International Center. Laurus formed SLC Hotel Partners, L.LC. to acquire this property, which has more than 13,000 square feet of flexible meeting space. It plans to renovate the hotel, but did not say how much it planned to spend on renovations.
Earlier in the year, the company acquired the Ramada Suites Hotel at the New Orleans Airport, a 130-room select service hotel at the entrance of the James Business Park and adjacent to the airport. Purchased in March, the hotel has more than 3,000 square feet of meeting space, two restaurants, and a business and fitness center. Laurus formed New Orleans Hotel Partners, L.L.C. to buy the hotel. It plans to upgrade the property and rebrand it as a Holiday Inn Express franchise. The firm did not release the estimated costs for the renovations.
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