Rockbridge Partners recently acquired the historic Canterbury Hotel in Indianapolis, a 99-room property located in the heart of that city’s downtown. Rockbridge plans to renovate the hotel into an upscale property. The company will spend big to rejuvenate the hotel’s lobby, expand its fitness center and update its lounge.
Rockbridge will also be taking part in a trend: A growing number of developers are purchasing and renovating hotels across the Midwest and the entire country.
CoStar Group recently reported on this trend, saying that hotel transaction volume is 50 percent higher this year compared to the same period in 2012. And this activity is spreading away from such traditional international gateways of New York, San Diego, San Francisco,
Consider Minneapolis, where the Millennium Hotel in that city’s downtown has recently reopened following a six-month renovation. Millennium Hotels and Resorts, owner of the property, spent $22 million to renovate all 321 of the hotel’s guest rooms. The company also renovated its public spaces.
And in Akron, Ohio, IRG Rubber City and Summit Development recently reached a deal with Hilton Worldwide to bring a Hilton Garden Inn hotel to the East End development in that city. The hotel will sit in a portion of the former Goodyear world headquarters campus. Construction of the five-story hotel is scheduled to wrap up in June of 2014.
What’s behind the boom in hotel transactions? CoStar cites the usual suspects: There has been a historically low level of new hotel supply in recent years. at the same time, hotel prices are rising and a relatively small number of hotel properties for sale in the largest metro areas of the country is causing investment activity to move into secondary markets across the country.
Art Adler, Americas chief executive officer of Jones Lang LaSalle’s hotels and hospitality group, is quoted by CoStar as saying that by the end of this year, U.S. transaction volume will reach $17.5 billion in the hotel sector. That would be an increase of 10 percent from 2012.
Washington DC and Miami, CoStar writes. These cities have dominated hotel investment activity since 2010, according to CoStar.
That is changing, though, as activity spreads across the country, something that we are seeing in the Midwest.
