MINNEAPOLIS—Graves Hospitality has decided to sell its Graves 601 Hotel located in downtown Minneapolis to New York-based Loews Hotels & Resorts. Graves officials say the transaction will allow their nearly 40-year old development and management company to redeploy capital into higher growth assets of its portfolio and open up reinvestment opportunities. Loews made an off-market, unsolicited offer so it could acquire a full-service Midwest property.
The price has not been disclosed, but Ben Graves, chief operating officer, tells GlobeSt.com that “it’s being sold at a top price; by far and away it’s the market leader.” He compared it to Graves’ 2012 sale of Hotel Williamsburg in Brooklyn. As reported in GlobeSt.com, that property, a boutique hotel with 64 guestrooms, sold for $33 million, or about $520,000 per room. The company will probably publicize the sales figure for the 255-room 601 Hotel when the acquisition closes in July.
“This was definitely an opportunistic sale,” he adds, “and very similar to the Hotel Williamsburg. In both cases, we really didn’t have plans to sell.”
“Frankly, this sale creates revenue for new development, management and investment opportunities that result in an even higher rate of return,” says Jim Graves, the company’s founder. “Accepting their offer was simply good business.”
Graves Hospitality owns and manages hotels under brands such as Hilton, Radisson, IHG and Marriott. In the past year, it took over the management of two properties in St. Paul, accounting for almost half of the hotel rooms in that city’s downtown. It will rebrand one of these hotels as Minnesota’s first InterContinental luxury hotel.
The company has developed and managed more than 100 hotels and restaurants, and this lucrative sale will help fund many of its projects, including a collection of new restaurants and four or five hotels in Manhattan, Minnesota and Chicago.
“Repeatedly, strategic reinvestment has proven to be a keystone of our company’s success,” adds Ben Graves.