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TUCSON-Local company TransWest Properties Inc. added 899 rooms to its portfolio, thanks to its acquisition of the 487-room Westin La Paloma Resort and Spa, and the 412-room Westin Hilton Head Island Resort and Spa. The new owner plans an additional $10-million capital investment to upgrade both hotels, and to expand the La Paloma.

The buyer acquired the 21-year-old La Paloma, which sits on 174 acres at 3800 E. Sunrise Dr., and the 22-year-old Hilton Head, on 14 acres at Two Grasslawn Ave., from a partnership led by Starwood Capital Group with help from $230 million in financing. The financing included a 10-year mezzanine loan from Ashford Hospitality, which carries a 14% interest rate, and a senior note from JP Morgan, which carries a rate under 7%.

“Both of these are nice trophy assets for them, and they have a lot of plans to spruce them up,” comments Patrick M. Barkley, principal with Newmark Realty Capital Inc.’s Phoenix office. Barkley, who helped TransWest acquire financing from Ashford Hospitality Trust and JP Morgan, tells GlobeSt.com that the company has been actively pursuing hospitality opportunities, both in Tucson and nationwide. “They already own a Doubletree, an Embassy Suites and three other assets around here,” he notes.

Barkley says Starwood Capital had already spent $6 million on La Paloma to upgrade the lobby and meeting space. TransWest plans to add 15,000 sf of ballroom space to the asset, which also has a 27-hole Jack Nicklaus-designed golf course.

Starwood, headquartered in Greenwich, CT, was represented by Eastdil Secured LLC of New York City. Starwood will continue managing both properties, which will retain the Westin brand. Insight Land and Investments of Phoenix represented TransWest.

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