Thompson Thrift Closes Hotel Land Deal Amid Coronavirus

FISHERS, IND—While the coronavirus pandemic ravages the hospitality industry, the Thompson Thrift Retail Group has managed to finalize the sale of a hotel pad to a developer that plans to build a $20 million Courtyard by Marriott near Indianapolis.

TTRG just closed a deal for an undisclosed amount with Dunn Hospitality Group, which intends to open a 145-room hotel during the latter half of 2021. The project is located within a $60 million mixed-use development here called The Stations.

Eric Wojak, development director for TTRG, tells GlobeSt.com that the deal, which had been in the works for about a year, “wasn’t without its challenges.”

“The hospitality industry was one of the hardest hit and still is,” he said. “A lot of getting this deal done, the credit belongs to our partner, Dunn Hospitality. It could’ve been very easy for them to throw their hands up and decide that it wasn’t a good time or it wasn’t the right time and be able to back out of that deal.”

David Dunn, president and CEO of Dunn Hospitality, noted in a statement that his company was “well-positioned with funding in place that allowed us to move forward amid the current economic climate.

“We think our development timeline will enable us to build this project while the economy recovers and bring another award-winning hotel to market at an opportune time,” he added.

An initial concern, according to Wojak, centered on “financing and what the banks might do,” but ultimately was not an issue.

However, a potential snag developed when Marriott requested to have the ability to convert the hotel to apartments “five or seven years down the road in the event that something like this [COVID-19] were to happen again,” Wojak said.

When TTRG bought the property, the firm made commitments to the land seller about what type of development would be on the site. During the two weeks before closing the deal with Dunn, TTRG renegotiated with the land seller, who had approval rights, to allow for residential use of the site. The apartment conversion would still be subject to typical city zoning approvals.

“Based on the current zoning in place, we believe that [approval for residential use] would be available to them,” Wojak said.

According to Wojak, TTRG’s other pending development deals haven’t crumbled as a result of the pandemic. In fact, Lori Wick, a spokeswoman for the firm, said the company just sold another property in Kentucky to a developer.

But Wojak said he has noticed that more buyers are asking to postpone deals.

“I think there are a lot of deals that are seeking more time from land sellers,” he added. “We’re seeing time being extended instead of contracts being canceled.”