Graduate Hotels Grab Land Near Universities

Graduate is a curated collection of hotels that reside in some of the most well-known university towns across the country, such as the latest at the University of Oregon, backed by AJ Capital Partners.

The latest Graduate is to be located near the University of Oregon in place of the former Hilton.

EUGENE, OR—A Graduate Hotel is coming to a college town near you, if this is not already the case. Graduate is a curated collection of hotels in some of the most well-known university towns across the country.

These hotels are backed by Adventurous Journeys/AJ Capital Partners, an organization of counter-culture hospitality and real estate investors who acquire, develop and design transformative properties in hot markets and resort destinations. AJ Capital Partners launched the Graduate Hotels brand just four years ago and has already put down roots in Berkeley, CA; Ann Arbor, MI; Tempe, AZ and Seattle, to name a few.

The latest property is to be located near the University of Oregon in place of the former Hilton Eugene. Holliday Fenoglio Fowler LP facilitated the $71 million financing for the acquisition and transformation of the Hilton for borrower, AJ Capital Partners. The HFF debt placement team consisted of managing directors Danny Kaufman and Casey Davidson, senior director Jeff Bucaro and associate Nicole Aguiar.

The three-year floating-rate loan will have two one-year extension options with Starwood Property Trust.

Loan proceeds of roughly $260,000 per key will be used toward acquisition costs along with the transformation and rebranding of the hotel. The hotel will remain open during the renovations, which will include a complete overhaul of all guestrooms, guestroom bathrooms, corridors, lobby and common areas.

Originally constructed in 1982, the hotel currently has 274 guestrooms and, with its access to the adjacent conference center, has 30,000 square feet of meeting and event space, making it the only hotel in the market that can accommodate large conferences, meetings and banquets. Graduate Eugene will have a food and beverage space reflecting the local culture and cuisine, including a lobby cafe and an indoor-outdoor beer garden that will complement and connect the hotel, conference center and adjacent Hult Center for the Performing Arts.

“There was strong demand for the financing due to AJ’s commitment to the Graduate brand and their reputation as innovative hoteliers with exceptional expertise within the boutique hotel space,” Kauffman said.

Situated at 66 East 6th Ave., the hotel is in the heart of downtown and is in walking distance to the Central Business District, PeaceHealth Sacred Heart Medical Center and the campus. Graduate Eugene is 12 miles from the Eugene’s airport, near Interstate 5 and is two blocks south of the Eugene Amtrak station.

GlobeSt.com learns that the University of Oregon has 23,634 students at a 87% retention rate for freshmen. It is a tier 1 national public research university.

Eugene is Oregon’s second largest city with more than 140,000 residents. It covers approximately 41.5 square miles, with the Willamette River running through the city and the McKenzie River joining the Willamette to the north of town. The elevation is 426 above sea level and the city’s topography features Skinner Butte to the north of downtown and to the south, Spencer Butte, now a 310-acre city park.

AJ Capital Partners continues to grow its portfolio of lodging investments, firmly establishing the group in the lifestyle-driven investment industry. Its goal is to achieve optimal risk adjusted returns for its investors who are seeking long-term capital investments.

“AJ Capital’s plan is to have unique hotel properties near major universities. This acquirer, AJ Capital, acquires land sites to convert to Graduate Hotels and is growing very steadily,” Kauffman tells GlobeSt.com. “This is a major university town and it was definitely important to be located in Eugene.”