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SAN ANTONIO-A little more than two years after acquiring the Crowne Plaza San Antonio Downtown as part of an eight-hotel, $236-million portfolio, an East Coast joint venture has sold the 410-room vintage hotel on the CBD’s northwest side.

Boston-based Pyramid Advisors LLC and Morgan Stanley Real Estate Fund IV-Domestic invested $6.4 million into renovations and re-branding the 21-story building at 111 Pecan St. before putting it back on the market. Now, the new owner of the former Adam’s Mark Hotel plans to put another $7 million into additional upgrades.

HEI Hospitality Fund II, based in Norwalk, CT, has mapped out a five-year cap-ex plan for the property. Merritt Hospitality, a wholly owned HEI subsidiary, will oversee the day-to-day operations and the renovation, which is scheduled to begin in about one year.

HEI senior vice president Roger Clark says the $425-million Fund II is geared toward acquisitions of 200- to 500-room, full-service, branded properties in the nation’s Top 25 markets. He acknowledges to GlobeSt.com that the Crowne Plaza San Antonio is an anomaly for the portfolio, but is intended to be a long-term hold. “The Downtown San Antonio market is very strong when it comes to leisure and conventions,” he says. “The drivers of the market are strong as is the demand.”

The CBD hotel opened in 1956 as an office building and then was converted in 1997 to a hotel. Its RevPAR and other financial data are not being released. The building, though, is the fund’s first acquisition in Texas. From an investment perspective, Clark says the fund is backed by university endowments so “by virtue of their investment values, we have a longer hold time than we might have had with a typical investment backer.”

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