Pebblebrook Reaches $369M in Investments with Purchase of Grand Hotel Minneapolis
- Oct 01, 2010
October 1, 2010
By Barbra Murray, Contributing Editor
Nearly 10 months after completing its initial public offering, Pebblebrook Hotel Trust has filled its portfolio with five premier assets in transactions valued at an aggregate $369.1 million, including its recent $33 million purchase of The Grand Hotel Minneapolis. The REIT just wrapped up the acquisition of the 140-room upper-upscale property.
Pebblebrook snapped up the Grand Hotel from iStar Financial Inc., which had taken possession of the downtown Minneapolis asset from The Wirth Cos. through a deed in lieu of foreclosure process. Wirth opened the hotel in 2001 at the location of the former Minneapolis Athletic Club, after having submitted the century-old building to a $54 million redevelopment program. Today the premier 14-story hotel features 6,500 square feet of meeting space, a full-service business center and a restaurant. Additionally, the property is home to the 58,000-square-foot Life Time Athletic Club and Life Spa.
Under Pebblebrook’s ownership, the Grand Hotel will undergo a makeover over the next 12 to 24 months at a coast of approximately $4.5 million. Kimpton Hotels and Restaurants will stay on as manager of the property.
The acquisition of the Grand Hotel, which Pebblebrook originally agreed to buy for $36 million, comes on the heels of the REIT’s purchase of the Monaco Washington DC. In a deal valued at $74 million, Pebblebrook plunked down $39 million for the 183-room hotel and agreed to assume an existing $35 million loan. Like all of Pebblebrook’s purchases, the Grand Hotel and the Monaco were funded with proceeds from the company’s December 2009 IPO. And it’s all about the über upscale and traditional upscale properties for Pebblebrook, which had a busy summer. The company also acquired the 422-room InterContinental Buckhead Atlanta hotel for $105 million and the 416-room Sir Francis Drake Hotel in downtown San Francisco for $90 million. The 269-room Doubletree Bethesda Hotel and Executive Meeting Center just outside Washington, D.C., in Bethesda, Maryland, was also added to the portfolio for $67.1 million.
Pebblebrook is still on the hunt and there is more acquisition activity on the horizon. The REIT recently entered into an agreement to purchase a hotel in Metropolitan Portland, Oregon, for $56 million.