Pair of recently completed hotels in tourism corridor sell for over $94M

A pair of recently completed hotels in Orlando’s tourism corridor sold last week for a combined $94.45 million, signaling a return to the market’s pre-COVID tourism economy.

The Marriott Residence Inn Orlando near Universal sold Dec. 1 for $45 million, while the dual-branded Springhill Suites and Towneplace Suites at 8040 Palm Parkway sold Nov. 30 for $49.45 million.

Southeastern Development Associates and LBA Properties co-developed the 195-key extended-stay hotel at 5616 Major Blvd. in 2018. The sale price for the off-market transaction breaks down to over $230,000 per key.

Michael Weinberg, Wyatt Krapf and Preston Reid with Berkadia arranged the financing for the buyer, an affiliate of Dallas-based Paceline Equity Partners. The company has been on a buying spree this year, collecting hotels in Boston and Charlotte in recent months and reportedly has another Orlando hotel under contract.

“Our team appreciated the opportunity to source financing for Paceline on three of their hotel acquisitions this year,” Krapf told GrowthSpotter.

Reid and Krapf also represented Tampa hotelier Ben Mallah in August of this year on the sale of the Four Points Sheraton Orlando for $31 million. Reid said that hotel sold at 20% below its Pre-COVID appraised value. The days of Orlando hotels selling at a “COVID discount” are over, especially for hotels near the attractions that cater to leisure travelers. The Residence Inn, being close to the Universal theme parks, was well-positioned to capitalize on the rebounding tourism market.

“Well-located, newer vintage premium-branded assets in Orlando are selling at or above pre-COVID pricing,” Reid said.

The team of Weinberg, Krapf and Reid also helped the owners of the Aloft Lake Buena Vista refinance their debt based on a new appraisal that pushed the value to about $200,000 per key. “That’s an asset that was completed in the midst of COVID — very scary — and they were able to refinance it at a good number because lenders recognize the opportunity in Orlando when it’s a good owner.”

That Aloft is right next to the dual-branded Marriott on Palm Parkway that sold last week. The all-suites/extended-stay hotel has 335 rooms and was completed in 2019 by local businessman David Bansmer and New Orleans-based developer Robert J. Guidry.

HHM Hospitality, which also acquired the Orlando Crowne Plaza on Universal Boulevard in the spring via auction, was the buyer. HHM received $15.9 million in financing from Western Alliance Bank for the latest transaction.

Paul Sexton, Vice President of HREC, said the industry and investors are bullish on Orlando, especially since international travel has resumed. “Nobody’s taking a discount, from what I can see,” he said. “Disney and Universal just had their best quarter ever.”

In early May, Host Hotels & Resorts Inc. purchased the 444-room Four Seasons Resort Orlando in a $610 million all-cash deal. The record-breaking sale equated to about $1.37 million a key — the highest price ever paid in the Orlando market.

While London & Regional Properties has made several purchases in Orlando this year totaling over $160 million. Those deals include the Orlando Marriott Village hotel complex, a 1,100-room hotel trio in Lake Buena Vista, purchased in June, and 486-room Marriott Sheraton Lake Buena Vista Resort at 12205 S. Apopka Vineland Rd., which transacted for more than $49.8 million.

New hotel projects that stalled during the pandemic are back on track. Sexton has sold two vacant parcels in Buena Vista Park on Palm Parkway, across from the Springhill Suites/Towneplace Suites, that were approved for new hotels in 2018. Both buyers are local groups with extensive experience in development and operations in the Orlando market.

Jumani Hospitality paid $3.8 million last week for the 2-acre parcel on Ravallo Resort Drive with plans to complete the 6-story, 110-key Hyatt House that was approved in 2017. The Jumanis also closed on the former Quality Suites Lake Buena Vista at 8200 Palm Parkway in November and are in the process of converting it to a Radisson.

Reddy Hotels paid $3.45 million in September for the adjacent 1.7-acre site with approved plans for a 113-room Tru by Hilton hotel.

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.