X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

DALLAS-In another public to private play, Eagle Hospitality Properties Trust Inc. has closed on its $680-million sale to Apollo Real Estate Investment Fund V LP, Aimbridge Hospitality LP and JF Capital Advisors LLC. The plan calls for keeping Eagle’s name intact and maintaining the REIT status.

The 4.5-year-old Aimbridge has marked its largest acquisition to date, doubling its room count with the take-over of the Covington, KY-based REIT’s 13-hotel portfolio in nine states and Puerto Rico. AP Aimcap Holdings LLC, the buyer of record, is investing another $37 million to upgrade the hotels, all of which will be keeping their Marriott, Embassy Suites, Hilton and Hyatt flags through new long-term agreements. Renovations have begun; completions are penciled for the end of first quarter 2008.

David Johnson, Aimbridge’s president and CEO, tells GlobeSt.com that the JV isn’t planning to flip any of Eagle’s real estate although would-be buyers are already knocking on the doors of the New York City-based and Dallas-based partners. “Initially, nothing was for sale, but we have been approached by potential buyers,” he confides. “We’ve now said ‘make us an offer.’”

In closing the deal as planned, the JV assumed $258.3 million of debt. Johnson says some debt will be defeased Oct. 15, the earliest possible date under Eagle’s agreement with the lender.

The acquisition took Aimbridge’s portfolio from 28 hotels to 41, providing inroads into Ohio, Boston, Florida and Scottsdale, AZ and its first Marriott-branded properties at 1200 Burr Ridge Pkwy. in Burr Ridge, IL and 10 W. Rivercenter Blvd. in Ohio. Aimbridge picked up 3,516 keys with the upper upscale, full-service portfolio buy.

Johnson says more than half of the hotels have been built since 2000. The package’s occupancy hovers 75%. “You really have first-class hotels,” he says. “The majority of assets are leading their markets and we think there’s opportunity for even more upside.”

Johnson says renovations and locations are underwriting the upside plan. The game book includes “incremental average rate increases,” he says. “With the rehab, we expect above-market growth in 2008 and 2009.” According to Eagle’s SEC filing, the portfolio’s RevPAR rose from $96.13 in second quarter 2006 to $103.16 in second quarter 2007 or a 7.3% increase.

Johnson says the Eagle buy-out has taken six to nine months to close. The seller started shopping the market in January. The biggest hurdle was “finding the right capital partner,” he explains. “We had a relationship with Apollo and it’s the perfect capital partner. We wouldn’t have had this deal come to fruition without them.”

Johnson says all Eagle employees at the property level are being retained. To make the close, Aimbridge did work-outs on management pacts with Beverly Hills, CA-headquartered Hilton Hotels Corp., Commonwealth Hotels Inc. of Covington, Prism Hospitality LP of Dallas and Chicago-based Global Hyatt Corp. As always, Aimbridge will manage the hotels, except for three that will remain under brand management–351-key Hilton Glendale at 100 W. Glenoaks Blvd. in Glendale, CA; 299-room Embassy Suites San Juan at 8000 Tartak St. in Isla Verde Carolina on Puerto Rico; and 336-room Hyatt Rochester, a convention center hotel at 125 E. Main St. in Rochester, NY.

A second Hilton-flagged property is situated at 7373 Turfway Rd. near the Cincinnati Airport in Florence, KY. The Embassy Suites’ flags are located at 4415 E. Paradise Vig on the Phoenix-Scottsdale line; 7001 Yampa St. near Denver International Airport; 555 N. Westshore Blvd. in Tampa; 10 E. Rivercenter Blvd. on the Cincinnati-Covington border; 207 Porter St. near Boston’s Logan Airport; 5800 Rockside Woods Blvd. in Independence, OH; and 5100 Upper Metro Place in the Columbus-Dublin submarket of Ohio.

“We are confident that with Aimbridge Hospitality and JF Capital as our investment partners, this will prove to be an excellent investment,” Randy Torres, vice president of the New York City-based Apollo, says in a press release.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.