Courtesy / Marriott
A view showing Portland's Eastern Promenade.
November 1, 2017
Residence Inn sale price among largest deals of year
Courtesy / Marriott
The recent sale of the Residence Inn by Marriott Portland to Apple Hospitality REIT Inc., a Richmond, Va.-based owner of 238 hotels, for $55.8 million makes it among the largest Maine hotel deals in recent years.
By Staff
The recent sale of the Residence Inn by Marriott Portland ranks among the richest commercial real estate deals of the year — and is among the largest Maine hotel deals in recent years.
The buyer, Apple Hospitality REIT Inc., a Richmond, Va.-based owner of 238 hotels, paid $55.8 million for the 179-room hotel, the real estate investment trust said in a press release. That translates to $311,000 per key for the hotel.
Through June 30, the largest commercial property sale in Maine was 62 MacArthur Circle, a 620-unit apartment complex in South Portland that sold for $87.5 million, according to the Mainebiz list published July 24. The second-largest deal was for another apartment complex, 46A Tamariane in Portland, at $50.25 million.
The Residence Inn deal rivals or may exceed the largest hotel deals in Maine.
“It’s right up there. That’s a very high price,” Roger Daigle of Daigle Commercial Group told Mainebiz.
Steve Hewins, president and CEO of the Maine Innkeepers Association, said he was not aware of any sale price that exceeds this one, though at least two deals challenge this one when renovation costs are factored in.
"We are not aware of any larger sales of lodging properties in Maine,” Hewins said. “There might have been as not all are public transactions. Recent renovations of older properties like the Westin Portland Harborview and The Cliff House in Cape Neddick rival this transaction in overall costs — acquisition plus renovations. This, and a number of smaller transactions throughout the state, indicated the relative strength of the hospitality sector in Maine, and its future prospects, in my opinion."
At the time the historic Eastland Park Hotel — now the Westin Portland Harborview — reopened in 2013, the Portland Press Herald reported that the owners had invested $50 million in renovations, exclusive of acquisition costs.
The Cliff House renovations totaled $40 million, the Portland Press Herald reported in June 2016.
Location, location, location
Part of the appeal of the 179-room Residence Inn may be in its proximity to the East End’s real estate boom.
The hotel, at 145 Fore St., is across the street from the future headquarters of WEX Inc., Maine’s second-largest publicly traded company, which will have several hundred employees there. The developer of the WEX building, Jonathan Cohen, broke ground in October.
On the diagonal corner will be an AC By Marriott hotel. A block in the other direction, at 16 Middle St., will be the new headquarters of Tilson Technology, one of Maine’s fastest growing companies. At 58 Fore St., developer Jim Brady plans a mixed-use development that will include residential, retail, office space and a marina. Add to the commercial development a continual wave of new apartment and condominium buildings and you have what is arguably the state’s hottest real estate markets.
For Apple Hospitality (NYSE: APLE), the Residence Inn will fit in with a portfolio of 238 hotels under the Hilton and Marriott flags. In addition to the Residence Inn, it recently acquired the 136-room Residence Inn by Marriott in Murray, Utah, for $25.5 million, the REIT said in a press release.
“We are pleased to enter the Portland, Maine, market and to strengthen our exposure to Salt Lake City through the acquisition of these hotels, further diversifying the range of corporate and leisure demand generators for our portfolio,” Nelson Knight, EVP and chief investment officer at Apple Hospitality, said in the press release. “In addition to completing the sale of three of our six full-service hotels in the past year, these acquisitions enhance our portfolio and highlight our focus on high-quality select-service and extended-stay hotels.”
Knight cited Portland’s strong hotel market, with a 5% gain in revenue per available room, or RevPar, according to data compiled by STR Global.
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