132-Room Foreclosed Hotel Collects $4M

"Obviously, the long-term value fell off a bit," Bill Murney, senior vice president for CB Richard Ellis Inc.'s local office, tells GlobeSt.com. He says the 2.8-acre property at 4234 S. 48th St. reeled in eight to 10 offers for the Miami-based Lennar, the titleholder since spring 2003 when it foreclosed on a local investor. The transaction was Lennar's third hotel foreclosure sale in the city in recent months and second in the Sky Harbor International Airport submarket.

The Hampton Inn-Phoenix Airport/Tempe's buyer is Ocean Park Hotels of Los Angeles, a newly formed hotel group with an operating partner, Jim Flagg, who has extensive industry experience, Murney says. The property, including a freestanding George & Dragon restaurant, was the group's first acquisition. "They were the highest price and the most qualified buyer," he says of a closing completed with a loan from a Los Angeles bank.

Built in 1986, the hotel's RevPAR is $37.21 and ADR is $63.75. Daily bookings average 56%. According to Murney, the flag is good through 2007 and must be replaced with an alternative branding. He says the 17-year-old facility will get "a couple hundred thousand in renovations," but basically it's "in pretty good shape." The hotel, with 119,354 sf, has a 400-foot front-row seat along Interstate 10, two miles from the airport.

Murney, who closed the deal along with CBRE's Jeff Cunningham, says Lennar's other foreclosure sales were the 103-room Best Western Bell in the city's northwestern sector and the 105-room Sleep Inn near Sky Harbor airport.