HREC Arranges Sale of 13 Property Midwest Portfolio
SEPTEMBER 19, 2008. HREC Investment Advisors successfully brokered the sale of a 13-asset hotel portfolio in various locations in Missouri and Illinois. The hotel portfolio totaled 839 rooms and consisted of a Comfort Inn, two Comfort Suites, and ten Super 8 Motels. Ted Anka, Vice President in HREC's Chicago office, handled the sale.
HREC Investment Advisors represented the seller, Midwest Lodging Associates, in the deal which closed for $39.5 million. The buyer was Shivam Hotel, LLC which is managed by Champak Patel of Oklahoma City.
The properties have experienced continuous capital investment over the years and represent superior assets within their market areas. Historically the properties have achieved strong operating results, recording RevPAR penetration index levels in excess of 100%, and a Net Operating Income margin of greater than 27% of total revenues.
"It was a challenge to sell this portfolio intact; there are not many buyers that can put together the purchasing power that Mr. Patel's group brought to the table. After HREC's intensive national buyer search, the sales process moved quickly once we had the right investors in place" said Ted Anka. "Furthermore, this limited service hotel portfolio continues to be a strong performer in a tough economic environment. An important factor for the buyer."
"To be able to secure debt on a $40 million deal these days is not easy and speaks volumes about the quality of both the product and the buyer," added Rick George, Principal of HREC Investment Advisors' Los Angeles office. "In a tough hotel transaction market, HREC is proud to have closed 35 hotel deals already in 2008."
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