A multimillion-dollar renovation is planned for the hotel over the next several years, including the construction of a new fitness center. The hotel, which was last renovated in 2005, is part of a 26-story, mixed-use development next to the Arlington metro. It occupies the first seven floors of the building and is linked by a skywalk to the Ballston Mall, the National Science Foundation office complex and other nearby office buildings. There is also 6,000 sf of flexible meeting space as well as an on-site parking garage.
This is the third management contract Interstate Hotels & Resorts has signed with Cornerstone and one of seven hotels it manages in the Washington DC/Northern Virginia area. Interstate has managed the Hilton Arlington since 1996.
Interstate Hotels & Resorts was unavailable for comment and did not reveal the terms of its long-term contract with Cornerstone. "Typically management contracts vary between 3% to 6% of revenues, depending on the size of revenue and the input of management company," Vikram Antin, an associate in Marcus & Millichap REIBC's National Hospitality Group, tells GlobeSt.com.
"It is hard to tell, though, with high-end properties because the contract structure can be so complex." Also, he adds, "Interstate is one of the largest independent hotel management companies in the nation so they have more leverage and more capacity than most management firms."
Cornerstone Hotel Income & Equity Fund is managed by Cornerstone Real Estate Advisers LLC, which is headquartered in Hartford.
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