MD Hotel Commands $42M
- Apr 06, 2018
Hersha Hospitality Trust has acquired the Annapolis Waterfront Hotel, a 150-room Autograph Collection Hotel in Annapolis, Md., for $41.5 million.
The Annapolis Waterfront Hotel is the lone Autograph Collection hotel in Maryland and the only waterfront hotel in the city of Annapolis. With the new addition, Hersha now operates eight hotels in the Greater Washington, D.C., area and four Marriott Autograph Collection hotels nationwide.
“It’s very strategic for us. We have our third-biggest cluster of hotels located in D.C., with five assets,” Ashish Parikh, Hersha’s CFO, told Commercial Property Executive. “It’s a good collection of hotels—everything from upper midscale all the way up to the luxury segment. We look at Annapolis as a good drive-to destination where we can leverage our expertise in D.C., and really drive the results for this hotel.”
In addition to the hotel’s 150 guest rooms, the hotel features 15,000 square feet of total indoor/outdoor function space, including the city’s only waterfront ballroom and an 8,500-square-foot patio overlooking the Chesapeake Bay.
The Annapolis Waterfront Hotel is located on the Chesapeake Bay at the mouth of the Severn River, just miles south of Baltimore and 30 miles east of Washington, D.C., providing a stable source of drive-to leisure, group and corporate demand. It’s close by numerous demand generators including the United States Naval Academy, St. John’s College, the Maryland State House and the State Capitol complex.
The asset also generates lease income through onsite parking, slip rental fees and various antenna leases.
Over the new few years, the plan is to renovate parts of the hotel with guest rooms and public spaces first on the list. Other possible upgrades include the addition of a new awning and painting the building.
A New Strategy
According to Parikh, Hersha is currently focusing on the sale of older suburban properties, aiming to purchase newer, higher growth hotels in younger markets and coastal locations, like the Annapolis Waterfront Hotel.
“Our entire portfolio is either on the East Coast or West Coast and this asset is very similar to how we view our independent assets on the West Coast and Florida,” he said. “We like these destination resorts that are close to major drivers.”
Hersha’s portfolio now consists of 49 hotels totaling 7,653 rooms, in locations including New York, Washington, D.C., Boston, Philadelphia, South Florida and select markets on the West Coast.
Last month, Hersha sold the Hampton Inn Financial District hotel, located at 32 Pearl St., in Manhattan, for $32.4 million. A month earlier, the company sold the Hyatt House in Gaithersburg, Md., for $19 million, and the Holiday Inn Express in Chester, N.Y., for $8.4 million.