Advertisement
Hotels & Hospitality Development News in Central Florida

Four Orlando-area Choice branded hotels sold this month for over $56M

Orlando’s resurgent tourism economy has led to a rush of hotel sales this month, including three Quality Inns and one Clarion flag, all to separate buyers.

“Orlando is seeing a tremendous amount of transaction volume in the first quarter of 2022, especially within the International Drive submarket,” said Ahmed Kabani, whose Kabani Hotel Group at Marcus & Millichap was involved in three of the sales.

Advertisement

Just this week, Atlanta-based HKB Hotel Group paid $18 million for the 200-room Quality Inn across from Icon Park on International Drive. The buyer entered the Orlando market last December with the purchase of the Red Roof-plus hotel right next door at 8342 Jamaican Ct. for $10.5 million.

DSH Hotel Advisors Managing Principal Dennis S. Hopper and Dylan Amin, Senior Investment Associate, held the exclusive listing with the seller, and the property was sold confidentially.

Advertisement

“This sale further demonstrates the strong demand that we’re seeing for hotels in Orlando and other Florida markets,” Hopper said. “We expect that demand to rise as the market dynamics continue to favor hotels as an ideal investment option. Inflation is helping increase top-line revenue, and Florida is seeing a record number of domestic travelers – allowing for hotel owners to capitalize on great market conditions – both from a valuation and operational point of view.”

“We believe there is still significant upside for the new owners through further renovating the property,” Amin said. “Transaction volume remains high while the market is favoring sellers and we are preparing for numerous more successful transactions within our firm over the next 12 months.”

Kabani, Luis Garino, and Suraj Dalal represented the buyer. This was the third Quality Inn transaction closed over a two-week period this month by the Kabani Group. On April 7, the group sold the 264-room Quality Inn International Drive, located at 5858 International Dr., for $16 million to Jacksonville-based Rore Investment Group.

“With a multitude of new upcoming demand generators, including Universal’s Epic Universe, investors are doubling down on their investments,” Kabani said. “This buyer is no exception to this. They plan to renovate and provide additional amenities to the property.”

Jonathan De La Rosa, first vice president of investments in Marcus & Millichap’s Miami office had the confidential listing to market the property on behalf of the seller, USA Investment, Inc.

A week later, the Kabani Hotel Group sold the 214-room Quality Inn & Suites Turkey Lake for $12.75 million. Built in 1990, the property had undergone recent renovations, including an extended breakfast area, hardwood floors, parking lot resurfacing, and premium furnishings. On-site amenities include an outdoor pool with poolside bar.

The Kabani Group represented the seller, Friendship Hospitality LLC., and the buyer, Aramar Investments, LLC. The buyer group has previously invested in hotel conversions, including the 2021 sale of a distressed hotel at 2950 Reedy Creek Blvd. near Disney.

“The new buyers are leveraging the location to rebrand and reposition the asset,” Kabani said. “They will make significant improvements and bring the hotel back to pre-pandemic levels.”

Advertisement

The fourth hotel sale of the month transacted April 15 on Osceola County’s W192 tourism corridor. SCG America, the U.S. subsidiary of Shanghai Construction Group, paid $9.7 million for the former Clarion Suites Maingate at 7888 W. Irlo Bronson Memorial Hwy. The 150-suite hotel was listed for sale a year ago for $9.5 million by Anup Shah with AHG Brokerage on behalf of seller George Chen. The sale included a 1.3-acre lot that was intended for a future phase of the hotel.

“There was a tremendous amount of interest in the property because of the location next to Margaritaville,” Shah said, noting that SCGA offered above the list price to lock in the sale.

SCG America currently owns and operates several hotels in Southern California, including the Class-A Hyatt Regency Orange County in the Disneyland resort area. Shah told GrowthSpotter the buyer intends to convert the Kissimmee asset into a luxury boutique property. “They’re looking to upgrade the hotel and take it up to 4-star level.”

Marcus & Millichap’s Florida Hospitality Investment Forecast cited 6.9% year-over-year growth in room nights in the first quarter of 2022. The state’s buyer pool is expanding, with transaction activity from cross-border and out-of-state capital sources increasing over the past year. The firm is projecting continued interest in the Orlando market this year due to the opening of the Terminal C at the Orlando International Airport in July and the much-anticipated Guardians of the Galaxy: Cosmic Rewind coaster at Epcot.

Have a tip about Central Florida development? Contact me at lkinsler@GrowthSpotter.com or (407) 420-6261, or tweet me at @byLauraKinsler. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.


Advertisement