Meridian Repurchases Hyatt Regency Bethesda
- May 07, 2015
The Meridian Group has acquired the Hyatt Regency Bethesda, a 390-room hotel in Bethesda, Md., from LNR Partners L.L.C., with plans to reposition the hotel.
The price of the transaction was not disclosed.
The Meridian Group is no stranger to the property, having owned at least a stake in the hotel from 1999 to 2010 before the property was sold for $106 million at a foreclosure auction in 2012. Meridian is re-acquiring the hotel through its discretionary real estate fund, Meridian Realty Partners II.
“First and foremost, we love the location,” Gary Block, the Meridian Group’s managing director, told Commercial Property Executive. “We are big believers in investing in assets that are 24/7, live, work, shop, dine, commute and play areas. This was exactly the type of asset we were looking for. When you combine that with the potential with the rehabilitation and repositioning of the hotel, that also fits our strategy.”
Among the changes coming are lobby renovations; improvements to guestrooms and bathrooms; a complete replacement program for the hotel’s draperies, carpeting and linens; lobby and common corridor enhancements; elevator and mechanical systems; and improvements to the hotel’s amenity package.
“We are venturing this with Highgate Hotels and are working through a business plan with them now on planning the guestroom, lobby and corridor renovations,” Block said. “We’re going to do some retail configuration to take advantage of the location at the Plaza.”
Located at 7400 Wisconsin Ave. in the heart of Bethesda, the full-service upscale hotel sits atop the Bethesda Metro station, and is just seven miles from the Central Business District in Washington, DC.
“We liked being near the metro and liked being in a mixed-use environment, and are literary almost a touch point to Bethesda row,” Block added. “We’re seeing demand at our back in the local economy. We see growth in the D.C. market and growth in hospitality and we’re going to return this to the best hotel in the Bethesda/Chevy Chase area.”
The hotel is currently under a management agreement with Hyatt Hotels Corp. until Dec. 31, at which point Meridian will have the option of rebranding the asset. Meridian has retained Highgate Hotels to manage the property after the expiration of the Hyatt management agreement.
Meridian now owns more than 10 million square feet of office, industrial, retail, hotel properties, and land with a focus on the metropolitan Washington, D.C. market.
“We look for assets in A+ locations that have renovation and value growth potential,” Block concluded. “We know the hotel and as long as we get it back to ’07 levels, we’ll see very attractive returns.”