Ohio-based Emerald Hospitality Associates paid more than $15 million on Tuesday through an investment affiliate to enter the Orlando market, buying the 122-key Hilton Garden Inn Orlando East/UCF Area, with another $1.5 million in renovations planned.
Located at 1959 N. Alafaya Trail, about 1.5 miles south of the UCF campus, the 7.72-acre parcel features a three-story hotel built in 2001, with 74,273 square feet of conditioned area.
Deed doc taxes reflect a price of more than $12.16 million, but total value paid for the property, interior assets and a renewed license with Hilton was roughly $15 million, Chief Operating Officer Edward Pavente told GrowthSpotter. That reflects an estimated per-key value of $122,950.
"We've been looking to expand our footprint in the southeast, and this happened to be an asset that we felt, based on our other properties with university demand drivers, we'd do well with," he said. "We tend to purchase and hold assets, so this wasn't a value-add purchase for us. It had all the criteria of a consistent market cash-flowing hotel."
Emerald serves primarily as a hotel management company, but offers a range of consulting services including project develoment.
The buyer entity, Hotel Trail LLC, is managed by Nimbus Investment Fund, LP, an independent affiliate of Emerald that is made up of a group of individual investors in Ohio, which an executive at Emerald also leads.
This is the company's third hotel asset in Florida and first in the Greater Orlando market.
"We have a $1.5 million renovation plan for the next 12 to 18 months, to include everything from exterior aesthetics to guest rooms, and lobby renovation to bring it up to new Hilton standards," Pavente said. "We've already started the process of meeting with some local vendors."
The buyer sourced a $13.44 million loan from Wells Fargo Bank to help finance the acquisition.
The seller was an affiliate of Virginia-based Crescent Hotels & Resorts, which previously paid more than $9.45 million in August 2013. The company still has hotels that it owns or manages in Cocoa Beach and Sunny Isle Beach, per its web portfolio.
The property was marketed to Emerald this summer, Pavente paid his first visit to the hotel in late August and the company brought it under contract and closed relatively quickly, he said.
Looking to 2018, Emerald is actively looking for more acquisition targets across Florida, including Greater Orlando, Pavente said. The group favors a strong brand affiliation, limited service size of 100 to 150 keys, and price range of $15 million to $25 million.