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McLEAN, VA-Crestline Hotels & Resorts, a subsidiary of Barceló Crestline Corp., has closed on the first part of a $200 million acquisition of management company Tidewater Hotels & Resorts. The privately held 30-year-old company was founded by owner Thomas Lyons and manages 17 hotels. The ownership of eight of those hotels was also part of the deal, but in a simultaneous closing, Crestline sold those hotels to Richmond-based Apple REIT Eight.

Crestline did not disclose the sales price of the portfolio; however an industry source tells GlobeSt.com that the entire transaction, including the sale to Apple REIT Eight, was in excess of $200 million. A central laundry facility in Virginia Beach also was part of the sale. The transaction was arranged by a team led by Doug Henkel of CB Richard Ellis Hotels.

Henkel tells GlobeSt.com that Crestline had been pursuing this portfolio on and off for the past four years. At the end of last year, he says, the two firms sat down to seriously negotiate. “This portfolio was never marketed publicly,” Henkel says. It is a significant transaction for Crestline, he continues, as it increases the firm’s management portfolio by 25%. The 17 properties will add 2,400 rooms to the company’s portfolio, which counts 66 operating hotels and four under construction in 14 states and the District of Columbia among its contracts.

The Tidewater portfolio is concentrated primarily in Virginia and in parts of North Carolina. Many of the hotels are on the beachfront, located throughout Virginia Beach, Charlottesville, Chesapeake and Bedford in Virginia, as well as Carolina Beach and Wilmington in North Carolina.

The full-service regional laundry facility that Barceló Crestline is also acquiring is located in Virginia Beach. The facility will continue to service the Tidewater properties, as well as additional hotels currently managed by Crestline Hotels & Resorts in the area.The assets will transfer in three closing, Henkel says. Yesterday four hotels, the management company and the central laundry facility closed. Two more hotels will close in July and two hotels under development will close in Q4.

When the deal is done, Crestline will be managing the following. In Virginia Beach: Holiday Inn Oceanside; Holiday Inn Surfside; the Sheraton Oceanfront; Courtyard by Marriott VA Beach; Courtyard by Marriott 37th Street; Residence Inn Oceanfront; Fairfield Inn & Suites Oceanfront; Holiday Inn Sunpree; and SpringHill Suites Oceanfront. In Charlottesville: Courtyard by Marriott Charlottesville; and the Courtyard by Marriott Carolina Beach. In Suffolk: the Courtyard by Marriott Suffolk; and TownePlace Suites Suffolk. In Chesapeake, it acquired the Staybridge Suites Chesapeake, a 115-key property and the 225-key Chesapeake Marriott, which will be opening this year. In Bedford, it acquired the Peaks of Otter Lodge. In Wimington, NC, it acquired Fairfield Inn Wilmington, a 124-room hotel that also will be opening in 2008. It acquired the 140-key Courtyard by Marriott Carolina Beach in Carolina Beach.

Courtyard by Marriott 25th Street, Courtyard by Marriott 37th Street, Courtyard by Marriott Charlottesville, Courtyard by Marriott Carolina Beach, Courtyard by Marriott Suffolk, TownePlace Suites Suffolk and Chesapeake Marriott Fairfield Inn Wilmington are the eight hotels that transferred to Apple REIT Eight.

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