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Oct 13, 2015 11:50 EST

Marriott Courtyard: Equity investment in the recapitalization and renovation of a well-performing Courtyard Marriott in a high-demand area

iCrowdNewswire - Oct 13, 2015

Marriott Courtyard

WHO WE ARE

The Sponsors are a small group of seasoned executives with a background of developing/investing in capital assets and leading complex organizations. We believe in putting our own capital at risk side-by-side with investors, which insures a very disciplined approach to asset acquisition and management. We enjoy working in a demanding and bottom-line oriented environment, making creative use of our broad knowledge and experience to drive profits and increase value.

OUR EXPERIENCE

Collectively the sponsors have extensive experience developing, investing, and managing commercial real estate assets. As the NYSE specialist for the stocks of Marriot International and Choice Hotels, Mr. Murphy has a keen understanding of the hospitality business. Mr. Pietrafesa spent eleven years in Partner and Director positions with The Pyramid Companies, the premiere major shopping center development and management company in the Northeastern United States. The Principals have completed over $800 million in real estate related transactions.

OUR PORTFOLIO

The Courtyard by Marriott Lynchburg will be the first property in this partnership. However, individually the sponsors own interests in apartments, warehouse buildings, and limited service hotels. We are in the business of acquiring, developing, redeveloping, and managing hospitality and residential assets throughout the United States.

OUR SELECTION CRITERIA

We are targeting well-located limited and select service hotels whose demand drivers are diverse and cannot move. Therefore urban settings, university contiguity, and hospital and airport adjacencies are particularly attractive to us. We target properties for acquisition that are under managed or positioned for redevelopment. We protect our downside by remaining disciplined about cap rates, and hands on with construction and renovations. Unlike a fund, we are not in a rush to put cash to work, so we choose our targets carefully, and invest a great deal of time in market research.

OVERVIEW

Hotel Acquisition I, LLC purchased a 90-room Courtyard by Marriott located in Lynchburg, Virginia. The hotel is situated just outside the gates of Liberty University and is consistently the #1 or #2 performing hotel in the region. This is a unique opportunity to own a premium branded Marriott hotel with in-place cash flow, upside opportunity following a guestroom renovation and an eighteen year franchise agreement.

In spite of being due for renovation, the hotel has continued to grow both revenues and net operating income in recent years. In early 2016 the hotel will undergo a $2.2 million renovation to its exterior as well as all guest rooms. With the modernization the hotel will earn an 18 year franchise agreement and will be able to capture a higher ADR beginning in mid-2016. 

THE PROPERTY

The subject property is a three-story building and consists of 90 guestrooms. There are 87 well-appointed guestrooms and 3 guest suites. All guestrooms will be completely renovated in early 2016, complete with new larger televisions, new soft goods and new furniture.

The hotel offers a bistro, indoor swimming pool, business center, meeting facilites and a fitness center which will be enlarged significantly as part of the renovation.

The hotel shows a steady increase in annual RevPAR (Revenue Per Available Room) through all cycles as a result of the variety of room night demand generated by four universities, Lynchburg’s stable economy and the demand from all sectors including corporate, leisure and government.

The net operating income (NOI) for the twelve months ending May 2015 (TTM) was nearly $1MM, a 32.1% margin after a 3% management fee and 4% reserve for replacements.

Strong performance for TTM December 2014 as the Courtyard was second in occupancy (77.4%), average daily rate (ADR) ($115.04) and RevPAR ($89.06) vs. the competitive set demonstrating its position as one of the premier hotels within the market.

AREA/LOCATION

Located in Central Virginia approximately 115 miles west of Richmond, Lynchburg is home to four colleges, two major hospitals, and one of the top school systems in the state. It is the commercial, cultural, entertainment, residential and retail hub of the Central Virginia region. Known as the “City of Seven Hills,” Lynchburg is situated on 50 square miles along the James River in the eastern foothills of the Blue Ridge Mountains.

2014 Accolades:

  • Top 100 Best Small Places for Business & Careers – Forbes
  • #23 Best Highly Concentrated High-Tech Industries – Milken Institute – Best Performing Small Cities
  • Top 100 Most Affordable Cities in America – Nerd Wallet
  • Cost of Living 8.5% below National – Forbes
  • Top 50 Cost of Doing Business – Forbes
  • Top 25 Best Places to Retire in Virginia – Forbes
  • Top Adventure Town – National Geographic
  • Top Trail Town – Trail Runner Magazine
  • Top 20 Best River Town – Blue Ridge Outdoors Magazine
  • Outstanding Runner Friendly Community – Road Runners Club of America
  • 2014 Voice of the Arts and Humanities Award
Contact Information:

Richard Pietrafesa
Peter J. Murphy
Sreeni Malireddy

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