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Kentucky investor swaps hotel assets near airport, $8M reno set for Doubletree

Kentucky investor swaps hotel assets near airport, $8M reno set for Doubletree
A view of the Orlando Airport Marriott Lakeside, which was bought this week by a Kentucky-based hotel investment group. (Marriott)

Kentucky-based Columbia Sussex Corporation paid an estimated $45-$50 million on Wednesday for the Orlando Airport Marriott Lakeside, doubling down on the Orlando market just a week after selling the nearby Doubletree by Hilton Orlando Airport a half mile north for $28.5 million.

Located at 7499 Augusta National Dr., the 485-key Marriott went for almost $100,000 per key to the company's affiliate CP Orlando Lakeside LLC. Deed doc taxes were paid on a real estate value of $45.558 million, but this doesn't reflect a full sale price with interior assets.

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Columbia Sussex sourced a $48.2 million mortgage from Regions Bank to buy the Marriott. The company did not respond to calls for comment late on Thursday.

The hotel was sold by an affiliate of Bethesda-based Diamondrock Hospitality, which previously paid $70 million for it at the height of the market in December 2005, per county property records.

Columbia Sussex owns more than 35 hotels across the United States, including six in Florida, with the Marriott now its lone asset in Orlando.

The company has become known as an investor that favors hotels which produce strong top-line revenues, as opposed to value-add properties that require further investment, which may have motivated its property swap near Orlando's airport.

The Doubletree by Hilton Orlando Airport, bought last week by GF Management.
The Doubletree by Hilton Orlando Airport, bought last week by GF Management. (GF Management)

The Marriott purchase followed a June 1 sale by Columbia Sussex of the 353-key Doubletree, a hotel due for renovation work that was not commanding top rates in the airport submarket. It was bought for a confirmed $80,736 per key by Philadelphia-based hotel owner-operator GF Management, via affiliate DHMCO Associates LLC.

Columbia Sussex previously paid $15.5 million in August 1996 for the property.

The acquisition is GF's third in the Orlando market in recent years, following its 2013 purchases of the 334-key Embassy Suites Lake Buena Vista Resort and the 123-key Hilton Garden Inn Orlando/North Lake Mary.

GF will retain the Doubletree flag and invest more than $8 million in renovations to the property's public spaces and guest rooms, the company announced on Monday. Those areas weren't fully renovated after Columbia Sussex changed the property's flag from Crowne Plaza to Doubletree in recent years.

GF Management sourced a $24 million loan from Huntington National Bank to finance the Doubletree purchase.

Columbia Sussex was represented on the Doubletree sale by HFF Orlando. A spokeswoman for HFF could not be reached for comment on Thursday evening.

The two sales near the airport are just the latest in a prolonged wave of transaction activity in that submarket. Six hotels sold near Orlando International Airport in 2015, including a Holiday Inn, a Sleep Inn bought by a local fuel station owner-operator, and a Holiday Inn Express bought by Driftwood Hospitality.

This year, Kansas-based Woodspring Hotels paid $1.225 million in January for 2.79 acres near the airport where it plans a 109-key extended stay hotel, and in March Alabama-based hotel developer and manager LBA Properties sought city approval to build an extended-stay hotel on part of an off-site airport parking lot on Hazeltine National Drive.

Have a tip about Central Florida development? Contact me at bmoser@growthspotter.com, (407) 420-5685 or @bobmoser333. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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