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COLLEYVILLE, TX-Realty Capital Partners Inc., stepping outside its core markets for the first time, has formed a partnership with Gulfport, MS-based Encore Enterprises to buy the 128-room San Antonio Marriott Residence Inn. With the first deal done, the scouts are on the prowl to acquire more limited service hotels for the play.

“We like to invest in markets we believe are reemerging,” Donna Arp, president of the Colleyville-based Realty Capital, tells GlobeSt.com. “We believe the limited service industry is moving up.”

The Realty Capital-Encore JV spent $9.4 million to buy the hotel at 4041 Bluemel Rd. in the northwest corridor from Boston-based AEW Capital Management LP. Realty Capital’s split, $2.5 million, was “raised in less than one working day,” Arp says about the ready-to-place equity from its broad-based pool of investors.

The hotel will be managed by Encore’s Pineapple Management Services. Occupancy has been 71% for a facility with a daily room rate of $62, according to Kent Maerschel, Realty Capital’s vice president of acquisitions. The JV took out a loan with PNC Bank of Pittsburgh to make the close.

According to Arp, the Marriott Residence Inn flag has 18 years remaining on the contract. The hotel, renovated two years ago, is located eight miles east of the San Antonio International Airport, two miles from the South Texas Medical Center and close by the USAA headquarters and military bases.

Realty Capital is scouting in Texas, Florida and Tennessee for additional limited service opportunities. Though Encore Enterprises kicked off the program, it’s not an exclusive partnership for the future, Arp explains. The first deal closed as a one-off under the banner of RCP Hotel Properties I Ltd.

But, Arp stresses, “we are not leaving our core markets in any way. This is just an expansion.” Until now, the firm’s primary investments have been garden-style office and retail, built with an in-house development team, and some residential projects.

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