Provenance Hotels, Thayer Lodging JV to Buy Hotel 1000 in Seattle
- Jun 25, 2014
Provenance Hotels has entered a joint venture with Thayer Lodging Group to acquire the 120-key Hotel 1000 in downtown Seattle for what the Wall Street Journal reports to be $63 million.
“There’s a lot going on in Seattle and it truly is for the long haul a market that we have and continue to be bullish on,” Bashar Wali, Provenance Hotels’ president, told Commercial Property Executive. “We really like the macro and the relationship with the Pacific area—the ports are big, the trade is big, the cruise ship business is now a meaningful business; all the demand generators are there.”
Open since 2006, Hotel 1000 features 120 luxury guest rooms, 9,100 square feet of conference and event space, a 100-seat restaurant, spa and state-of-the-art golf simulator.
The 14-floor hotel is located at the intersection of 1000 First Ave., and Madison Street, and is topped by 10 floors of upscale condominiums in a building that is ideally located steps from the waterfront along Elliott Bay, and conveniently centered between Pike Place Market, Seattle Art Museum, the business district and historic Pioneer Square.
“It’s small, relatively speaking with 120 rooms, and currently the number one hotel on Trip Advisor and the second-highest rated after the Four Seasons,” Wali said. “We see the opportunity to only improve on its performance and enjoy the upswing that Seattle receives.”
Provenance will operate the Forbes Four Star-rated Hotel 1000 and according to Wali, the company now operates two of the five Four-Star-rated hotels in Washington, with the Forbes Four Star-rated Hotel Murano in Tacoma, Wash. already in its portfolio.
“Generally, we pursue value-add opportunities but this is more in the core category, but we see an opportunity to add sort of our touch, which comes mostly from creating stories and personalities and making these destinations beyond just luxurious, comfortable places to sleep but rather places that people visit,” Wali added. “Given the bones of this building and the quality of the service, creating an authentic story will improve the loyalty and bring more people to it.”
The acquisition is the first joint venture between the two companies and the third purchase made by Thayer with its $300 million Thayer Fund VI. In total, Thayer has completed 44 hotel investments with a total acquisition value of approximately $2.7 billion.
“Provenance’s stellar track record in the lifestyle space, deep knowledge of the Seattle market and experience as owners makes their management approach ideally suited to our investment strategy,” Bruce Wiles, Thayer Lodging Group’s chief operating officer, said in a company release. “Like our other recent marquee acquisitions, the Ritz-Carlton San Francisco and Hilton Los Cabos Beach & Golf Resort, Hotel 1000 is a distinctive asset with opportunity for improved performance that makes it ideal for deployment of Thayer’s Fund VI.”
The acquisition is the 14th hotel in Provenance Hotels’ portfolio, and seventh under its management. Over the last few years, it has partnered with Woodbine Development Corp./Hunt Realty to purchase the Governor Hotel in Portland; partnered with GB Lodging to acquire the Ambassador Hotel in New Orleans, La.; and teamed with Bolour & Associates to acquire an oceanfront parcel in Hermosa Beach, Calif. that is slated for development into a luxury boutique hotel.