Located at 5905 International Drive, just west of the intersection with South Kirkman Road, the company acquired two lots totaling 5.38 acres. One now serves as surface parking, while the other is occupied by the hotel, which was built in 1974 and has 19 floors with more than 152,000 gross square feet.
Hotel Capital, a private equity real estate investment firm that provides debt and equity capital to the hospitality industry, purchased the property through Florida affiliate Icon Orlando LLC, created on June 16. The company will own and operate the property, replacing previous management firm Aimbridge Hospitality with its own general manager.
"We wanted a hotel on International Drive and we think this North end of I-Drive will be ripe for further development, and is right where we wanted to be," Michael Collier, principal and CEO of Hotel Capital, told GrowthSpotter on Wednesday.
The property will go through a brand-required renovation that is phased over the next three years, with an early estimate on the investment as "multimillion," per Collier.
Hotel Capital will submit renovation designs to Starwood for approval, a process that usually takes six months. A general contractor has not been chosen for the project, and Collier estimates it could start nine to 12 months from now.
The sale breaks down to an estimated $49,000 per key. That value is less than what was paid for the 1,004-room Doubletree Hilton at SeaWorld on South I-Drive, which sold on May 19, but more than a number of mid-scale hotel properties in Greater Orlando currently listed for sale.
Industry experts expect near record volume for Orlando hotel sales in 2015. More than $2 billion of hotel transactions have either closed or are under contract so far this year, a value that could triple Orlando's last peak year for hotel sales in 2013, GrowthSpotter reported on June 15.
"The Four Points transaction is an indicator that investors believe in the ongoing redevelopment of the North I-Drive market, which will be anchored by Skyplex on the southern end, the Orlando Premium Outlets and Artegon shopping complex on the northern end, and what we all hope will be something fantastic in the middle on the Wet 'n Wild site ... and possibly the BlackMINE Group site," said Paul Sexton, vice president of HREC Investment Advisors. HREC specializes in the lodging industry.
"With any luck, we will see transactions during this cycle on some of the other under-utilized sites along the same stretch of I-Drive that will put those sites into the hands of owners that have the ability to contribute to the transformation of the area," he added.
The property was previously owned by Garrison Orlando Hotel Owner LLC, an affiliate of Garrison Investment Group out of New York, which bought the two parcels in April 2011 for $10.5 million. Lisa Zaranek of CBRE represented the seller in the deal.
Hotel Capital has investments in other Orlando-area hotel properties. It bought the former Calypso Cay Suites in Kissimmee in 2014, through a joint venture with Sun Development and Management, and renovated the property into a 150-room SpringHill Suites by Marriott, an $11 million investment that reopened in February.
The company also helped the owner of the former Radisson Resort at 8444 I-Drive refinance the property, which is now the Allure Hotel.