$51M Buys Atrium Suites for Luxury Repositioning

The acquisition and renovation of the four-acre Atrium Suites property is being funded largely by a $66-million loan from Lehman Bros. that was sourced by Xavier Sheid, managing director of Holliday Fenoglio Fowler's San Diego office. The three-year, non-recourse loan floats over LIBOR; the borrower bought an interest rate cap at closing. Shied did not divulge the loan-to-total-cost ratio on the loan, but tells GlobeSt.com that the borrowers "put up a significant amount of equity."

"The borrower plans to transform this property into an exclusive, high-quality luxury boutique hotel, which will feature personalized service in an intimate atmosphere with an edgy, modern design and a trendy pool and bar scene that will be the center of entertainment at the hotel," Shied says. "This concept will appeal to the young, affluent customer who desires up-scale luxury lodging in a non-gaming environment."

The enhancements to the will be phased in order to keep the hotel operational during the repositioning. Upon completion in late 2008, the Paradise Boutique Hotel will feature large king and queen sized suites equipped with full wet-bar entertainment areas; audio/video systems with flat-screen televisions; and wireless internet. Public-area amenities will include a lobby lounge and bar area; an upscale New York-style destination restaurant and cocktail bar; an expanded pool deck with pool bar lounge, cabanas, entertainment amphitheater and spa area, and a nightclub/lounge for evening entertainment and dancing.

Asia Pacific Capital Co. and Financial Capital Investment Co. acquired Atrium Suites under the name AP Hotel LLC. The seller was listed as MBP Land LLC, which Shied says is an entity of B.U. Patel's Tarsadia Group. Patel, which owns in excess of 4,400 motel rooms in the US, acquired the Atrium Suites property in December 2004 for $21 million. Asia Pacific's Alter could not be reached Tuesday for comment on the acquisition.