Chesapeake To Acquire Denver Marriott City Center

By Natalie Dolce

Print Email Share Reprints News Tip? Get Alerts

Denver Marriott City Center

(Mark Your Calendars: RealShare HOTELS 2011, September 15 in New York City).

DENVER-Chesapeake Lodging Trust has entered into a definitive agreement to acquire the 613-room Denver Marriott City Center located in Denver for $119 million, or approximately $194,000 per key. The Trust intends to fund the acquisition with available cash on hand and by borrowing under its revolving credit facility.

Completion of the proposed acquisition is expected within the next 30 days, subject to satisfaction of customary closing conditions. The Trust intends to assume the existing management agreement with Marriott International Inc., according to a prepared statement.

James Francis, Chesapeake Lodging Trust’s president and CEO, says, “The Denver Marriott City Center will be a great addition to our hotel portfolio given the quality of the asset, its location in the CBD of a major market, and its close proximity to the Colorado Convention Center.” He adds that “at $194,000 per key for a upper-upscale hotel requiring little additional capital, we are acquiring the hotel well below replacement cost and with a very strong current yield, which makes this acquisition quite compelling even during these uncertain times.”

The Denver Marriott City Center, located at 1701 California St., is part of the mixed-use City Center building ideally situated in the core CBD of downtown Denver and just a few blocks from the Colorado Convention Center. The City Center building with 43 floors is the largest mixed-use building in Denver containing approximately one million square feet of office and hotel space.

The Denver Marriott City Center, which is located on the first 20 floors of the building, has 613 guest rooms which were completely renovated in 2009 with the new Marriott guestroom package. The room mix includes 316 kings, 252 double-bedded rooms, 31 executive suites, 12 hospitality suites, and two presidential suites.

It currently features 28,000 square feet of meeting space, including the 14,500 square foot Colorado ballroom and 6,000 square foot Denver ballroom. The Trust intends to renovate the existing food and beverage outlets, and in the process, relocate the existing restaurant and add an additional 4,500 square feet of meeting space, bringing the total to 32,500 square feet.

The Denver Marriott City Center’s s location in the heart of the CBD and its proximity to the Colorado Convention Center make the hotel a convenient setting for transient, group and convention business, according to a prepared release. The hotel’s location provides easy access to all of the popular downtown attractions and corporate demand generators. As the only full service Marriott hotel in downtown Denver, the hotel enjoys a strong contribution from the Marriott reservation system and Marriott Rewards loyalty program.

Chesapeake Lodging Trust has been busy buying in recent months. In July, as GlobeSt.com reported, the Trust purchased Hotel Adagio in San Francisco for $42 million. Also in July, it closed on a $130 million three-year term loan, secured by two hotels the REIT acquired over the past six months. One was the 368-room Le Meridien San Francisco and the other was the 360-key W Chicago--City Center. And in June, the Trust acquired the 210-room Hotel Indigo San Diego Gaslamp Quarter located in San Diego for $55.5 million.

Categories: West, Hotels, Acquisitions/Dispositions, Denver