"The Philadelphia market is really strong but doesn't reallyhave any true boutique hotels at this time," Holden Lim, seniordirector at Cushman & Wakefield Sonnenblick Goldman, tellsGlobeSt.com. "So it makes sense for them to look at that market.Their goal is to expand their geographic reach to places theyaren't in."

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Kimpton has a history of transforming buildings intoone-of-a-kind hotels. The VU Hotel used to an old printing factoryon the Far West Side of Manhattan and the Hotel Monaco in Baltimoreformerly was the headquarters for the Baltimore and Ohio Railroadin the 1900s. The Architect's Building was completed in 1929 toserve as the headquarters for the local chapter of the AmericanInstitute of Architects.

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"This is what they do and this is what they're good at. The wayKimpton increases their portfolio is they buy these older andhistoric buildings. They're very good at these adaptive reuses,"Lim says. "They basically get their construction team in there.They have a pretty big in-house construction team, and they gothrough the building and come up with ideas for the hotel."

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Lim helped Kimpton find financing in Salt Lake City when thecompany turned an old bank into the Hotel Monaco. "It's very toughto find construction finances these days. Kimpton, as a developer,they don't have the same reach with lenders than we do," says Lim."In this kind of changing market, almost every day it seems numberschange. It's such a dynamic market right now, it makes sense for alot of companies to hire an intermediary company like us to helpthem."

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Greg Wolkom, CFO of Kimpton, says in a statement that "weappreciate Wachovia's confidence in Kimpton at a time when thefinancing markets are particularly challenging. Kimpton's abilityto raise debt and equity capital in the current capital constrainedmarket is further evidence of our market leading position in theboutique and lifestyle hotel segment."

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The future hotel sits on 117 S. 17th St. in the RittenhouseSquare. Hotel Palomar will feature 230 rooms, 6,500 sf of meetingspace, a 650-sf fitness center, a restaurant and a bar.

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