Both of the upscale boutique hotels are located in the left bank of the River Seine. The 25-room Hotel Le Walt, a short walk away from the Eiffel Tower, opened in September while the 36-room Hotel Le Marquis will open this month. Both are expected to attract business and leisure travelers with room rates in the $200 range. Hall tells GlobeSt.com the hotels will need less than 60% occupancy to breakeven, but he is expecting occupancy above 70% after the properties are up and running for a while.

Hall says one of the unique parts of the transaction is that it included the land, which doesn't often happen in the city. "We have done quite a bit of investing in Europe, in both commercial real estate and non-commercial real estate ventures," says Hall. "We are generally contrarian-type investors and real estate in Paris had experienced some declined in 2000 and 2001."

Hotel Le Marquis required a complete tear down and redevelopment. The Le Walt property was taken down to its studs. Financing for the project originated out of France. Hall says the joint venture received a 10- to 15-year construction-to-permanent loan with an interest rate of less than 6%.

Hall says the capitalization rate on an all-in basis is in the high single digits, or the low-double digits on an un-leveraged basis. He admits the hotel market in the city is fairly soft, but says that just like the US, as European travel comes back travel in and around the country is picking up. Moreover, he says, "Paris is a great place to own real estate, and these are irreplaceable locations."

Chauve will manage the two hotels. Paris-based Jacques Mechali is the architect behind the two renovations; Paul Sartres is the interior designer.

Demolition and subsequent construction for the new Hotel Le Walt began in July 2002, two years after acquisition. The former two-star property was built in the 1800s and purchased by Hall and Chauve in 2000. The Hotel Le Marquis, purchased in June 2001, is undergoing a complete interior renovation that will maintain the turn-of-the-century facade.

"We see a tremendous investment opportunity with these hotels and feel there is a demand for high quality accommodations in the area," says Hall. "Our objective is to offer services found at larger five-star European properties, while providing an attractive room rate and maintaining the personal touch of a family owned and operated business."

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