Portland's Residence Inn sale indicates strong market
Courtesy / Holliday Fenoglio Fowler L.P.
The Oct. 13 sale of the Residence Inn Portland is another indicator of the strong hotel market in the greater Portland region.
Norwich Partners sold the Residence Inn Portland at 145 Fore St. to an undisclosed buyer in a deal that closed Oct. 13.
Terms of the acquisition were not immediately available. It will remain a Residence Inn.
The 179-room hotel is situated near the Ocean Gateway and is surrounded by what is arguably the state’s hottest real estate market, with a new corporate headquarters under construction for Tilson Technologies and one planned for WEX Inc. It is on the diagonal corner from an AC Marriott hotel that’s under construction. Not far away is the former Portland Co. site, which will be developed as a mixed-use property.
Holliday Fenoglio Fowler, a commercial real estate firm, represented Norwich Partners, which is headed by David Leatherwood and has its management office in Lebanon, N.H.
Norwich Partners is a New England and Florida-based developer of and investor in commercial real estate, primarily hotels in the Northeast and Florida, founded in 2003, according to its website. Leatherwood has been active in the hotel business since 1991. He has developed/co-developed over 4,000 hotel rooms under various major flags including Clarion, Hampton Inn, Courtyard by Marriott, Residence Inn by Marriott, Envoy Hotel by Marriott, Moxy by Marriott, AC by Marriott, SpringHill Suites by Marriott, Element by Westin, Aloft Hotels and Homewood Suites by Hilton.
Inn recently completed renovations
Residence Inn Portland is located across from the Ocean Gateway Garage and just up the street from the Ocean Gateway Terminal cruise port. Completed in 2009, the five-story property consists of 179 suites, the Shipyard Lounge, 1,235 square feet of event space, an outdoor courtyard, business center, fitness center, indoor pool and complimentary hot breakfast.
According to the HFF website, Residence Inn is an upscale, extended-stay hotel brand. Each hotel offers spacious suites with separate living/ sleeping areas and fully equipped kitchens.
The Residence Inn Portland recently completed a $2.1 million guest suite and public space renovation. As a result, the hotel is in excellent condition and requires minimal capital expenditure for the new owner, according to the news release announcing the sale.
The HFF investment sales team representing the seller included managing director Denny Meikleham, senior director Alan Suzuki and director Matthew Enright.
Meikleham, who is based in Boston, said of the Residence Inn name: “It’s generally considered the best brand in the hotel business. You don’t want to give up that brand.”
Buyer is a national hotel REIT
HFF began marketing the property early this past summer. HFF had its eye on particular buyer profiles, said Meikleham.
“We didn’t market it widely,” he said. “We knew who the buyer profile was.”
Still, he added, “We had a number of people looking at it.”
HFF targeted two specific types of buyers, Meikleham said. They included real estate investment trusts (REITs), as well as regional hotel developer/operators who understand the Portland lodging market and have the financial strength to acquire hotels.
“We focused on hotel REITs that were primarily interested in acquiring select service hotels rather than those firms who specialize in full service hotels,” he said.
“Select service” hotels, he explained, don’t have the amenities associated with full-service hotels, such as restaurants or large banquet facilities.
Ultimately, he said, Residence Inn was purchased by a national hotel REIT. The new owner will make some improvements to bring it up to current Marriott standards.
“Fortunately, David Leatherwood just finished an upgrade, so it’s in great shape,” said Meikleham.
Win-win transaction
Portland has evolved into a strong lodging market and is therefore a desirable target market for hotel developers and buyers, he said, adding, “So for Norwich Partners, it was the right time to sell. This purchase resulted in a win-win for both the seller and the buyer.”
HFF has handled five hotel sales in the Portland area in the last two years, and all have moved quickly, he said.
“There’s a lot of interest in hotels in Portland,” he said. “Portland hotel performance continues to be very strong. There are so many options in New England for things to do, but Portland is definitely a Top 10 destination in New England. And Portland is generally considered the business capital of Maine. You’ve got a great combination of medical demand, tourism, transient business demand, group business—it has multiple demand generators working in its favor. I think it will continue to be a popular destination.”
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