Hollywood-based hotel owner-operator AD1 Global paid $20.5 million on Wednesday for the 200-key Comfort Inn Orlando - Lake Buena Vista, with a light PIP investment to come and flag change being considered, the company's CFO told GrowthSpotter.
Located at 8686 Palm Parkway, the 5-acre property includes a seven-story hotel built in 1988. It lies just east of the intersection with S. Apopka Vineland Road, and 1.4 miles from the Disney Springs entrance.
This is AD1's second Orlando-area hotel purchase in the past month, following the Quality Suites Royale Parc in Kissimmee on Sept. 14. The company also bought a property in Tallahassee last week.
"Lake Buena Vista is the best market in the area in terms of ADR (average daily rate)," said Alex Fridzon. "We're trying to position ourselves in different markets geographically and in terms of brands, which is what's behind the properties we're buying and developing."
A Property Improvement Plan (PIP) for the Comfort Inn will be minimal, he added, as the hotel was in general good condition at time of sale. AD1's management affiliate has taken over the property, and the company expects its sales team can improve the bottom line, Fridzon said.
Like with the Royale Parc in Kissimmee, AD1 is considering a flag change for this Comfort Inn in the short- to mid-term to a "more upscale brand," Fridzon said. He declined to name which flags are being pursued.
The seller was an affiliate LLC of local owner-operator Sun Vista Hotels, managed by Alpesh Khushal, which previously paid $10.1 million for the property in January 2013. He owns one other hotel in the tourism corridor, a La Quinta Inn on Jamaican Court bought in late April 2016.
Shamir Patel of Hunter Hotel Advisors marketed the property for three months earlier this year before AD1's offer terms surfaced as the best, he told GrowthSpotter. Khushal had a working relationship with AD1, having sold them the Best Western International Drive in July 2015.
Patel is now helping Khushal search for a value-add hotel property to reinvest his sale proceeds, preferably in Central Florida.
Khushal is working within the 45- and 180-day opportunity windows of a 1031 exchange, but won't rush into a purchase, Patel said.
This is AD1's fifth hotel asset in the Greater Orlando market, following a neighboring Best Western and Comfort Inn on International Drive, a Park Inn by Radisson in Kissimmee and the newly-purchased Royale Parc.
The company has a sixth hotel totaling 315 rooms planned for 5.18 acres bought in August near SeaWorld, and a trio of select-service hotels with shared water park planned for 57 acres on Bali Boulevard.