Two neighboring hotels along South Portland’s Sable Oaks Drive sold within a month of each other to out-of-state hotel operators.
Holiday Inn Express at 303 Sable Oaks Drive sold to an affiliate of AON Hospitality Group by Beddy Bye LLC for an undisclosed price.
Portland Sheraton at Sable Oaks at 200 Sable Oaks Drive sold to Sable Oaks Hotel LLC, an affiliate of Colwen Hotels, by Lullaby LLC for an undisclosed price.
Cherko Fusco Realty, of Schenectady, N.Y., represented the sellers in both transactions. David Costello of Rockwell Group served as broker of record on the Holiday Inn Express transaction.
Both sellers are affiliates of Schott Management, led by George Schott, an Auburn developer whose larger projects have included residential development at Brunswick Landing and renovations of the Auburn Mall and other retail plazas.
Schott carried out significant renovations to both properties a few years ago and both will have smaller renovations coming in the near future, said Cherko.
“I believe he felt that he has gotten the most out of each property and was ready to let new owners reap the benefits of what will come after a new renovation,” he added.
Situated in one of Maine’s most dynamic lodging submarkets, both offer nearby access to I-95 and the Maine Mall and are near the Portland International Jetport.
Holiday Inn Express
Holiday Inn Express is a 130-room, five-story hotel built in 1998 on 4.48 acres, catering to a mix of corporate and leisure demand. Amenities include an indoor pool, hot tub, business center and 720 square feet of meeting space.
The transaction was completed on an off-market basis.
The buyer is an affiliate of AON Hospitality, a Fleming Island, Fla.-based hotel ownership group. With the deal, the buyer now has 15 hotels overall and fourth Holiday Inn Express. It’s the buyer’s first hotel in Maine and third in New England. The company’s other hotels are in New Hampshire and Florida.
“Closing hotel transactions has become increasingly challenging over the past few years as lenders have remained cautious toward the sector,” said Bryce Cherko, principal of Cherko Fusco Realty. “Despite broader market headwinds, Portland continues to stand out as one of the most attractive hospitality markets in New England. Even with a slower pace of activity over the past year, fundamentals in the Portland market remain strong and continue to attract high-quality ownership groups.”
The buyer’s strategy is to expand in high-growth markets, Cherko told Mainebiz.
Relationships
Cherko Fusco Realty cultivates long-term relationships with hospitality operators across the U.S. and discussed the hotel opportunity with a number of qualified groups, including AON Hospitality and its co-founder and president Gary Patel, which ultimately clinched the off-market deal.
“I’ve worked closely with Gary for a few years on a number of deals,” Cherko said. “While I am based in the Northeast, I am also active in Florida, which is where our relationship initially developed.”
Cherko said he learned that AON Hospitality was looking to expand in New England and stayed in close communication with the group as opportunities surfaced.
“Because of that established relationship and our understanding of their acquisition criteria, we were able to present them with an opportunity that aligned perfectly with their strategic growth objectives,” he said.
He continued, “Their familiarity with the Holiday Inn Express brand and their operational expertise allowed them to underwrite confidently and move quickly. Ultimately, their decisiveness and credibility positioned them to secure the deal.”
The property was in good overall condition at closing.
“As is typical with branded hotel transactions, there will be a brand-mandated property improvement plan,” said Cherko. “These updates are standard in most hospitality transactions and ensure the asset remains aligned with brand standards and competitive within its market.”
Portland Sheraton at Sable Oaks
Built in 1988, Portland Sheraton at Sable Oaks is a 226-key full-service hotel on 10 acres. Amenities include 12,330 square feet of meeting and event space, making it a full-service convention-oriented asset. Strong year-round demand is driven by tourism, corporate travel, health care, education and group events.
The buyer, Sable Oaks Hotel LLC, an affiliate of Colwen Hotels, is a New Hampshire-based hotel owner and operator with an expanding portfolio throughout the Northeast.
“The capital markets for hospitality remain disciplined and highly selective,” said Cherko. “These deals required strategic positioning, relentless buyer engagement and hands-on oversight from start to finish.”
Closing its second transaction in the Greater Portland market in a short time speaks to the strength of the market, he said.
Market complexities
The hospitality investment landscape has shifted significantly.
“While interest rates have moderated slightly from recent highs, they remain elevated compared to the ultra-low-rate environment of a few years ago,” Cherko said. “That alone has made it more difficult for transactions to pencil.”
Additionally, sellers’ expectations were influenced by a post-COVID surge in travel demand.
“The market has since normalized, requiring a recalibration of pricing expectations,” he continued.
At the same time, operating expenses, including labor and materials, have increased and lenders have become more selective, often prioritizing experienced borrowers and stabilized assets due to hospitality being viewed as a more operationally intensive asset class than multifamily or industrial.
“Successfully closing transactions today requires aligning seller expectations with current market realities, underwriting renovation obligations carefully, demonstrating future upside and working with buyers who have strong lender relationships and operational expertise,” he said.
