X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ATLANTA-Fortress Investment Group LLC has sold the Clarion Hotel Atlanta Airport to Fahim Shah, an individual investor out of California, for an undisclosed price that is well below replacement cost. The 232-key hotel located on 5.2 acres is valued at $7.6 million, according to the latest records filed by the Fulton County Board of Assessors.

The Clarion, located at 5010 Old National Highway, is less than three miles from Hartsfield-Jackson Atlanta International Airport and 10 miles from Downtown Atlanta. Amenities include indoor and outdoor pools, a casual-dining restaurant and over 7,000 square feet of meeting and banquet space. Currently, room rates at the Clarion range from $59 to $79 per night. Average occupancy at the hotel is about 60%, which is the market average, says Mark Fair, managing director for Jones Lang LaSalle Hotels.

Fortress Investment Group was the original lender on the property, which was up for sale for a year and a half until the firm foreclosed and hired Jones Lang LaSalle Hotels to market the hotel. Offers were made that were substantially higher than the final sales price, says Fair, but were unable to close because of lack of financing. “The seller ultimately decided on a seller-finance offer because the price premium over all-cash offers was about 30%,” he says.

The deal worked out for both parties involved, explains Fair, because the buyer was able to secure attractive financing in a market where financing is almost impossible, and the lender now has a borrower that is planning to put substantial capital into the asset. Shah, who will also operate the hotel, plans to complete $1.5 million to $2 million in cosmetic renovations, including new carpets, drapes, bedspreads and TVs. New flooring will also be installed in the common areas and meeting space will be renovated.

“Seller financing is almost the only way to get deals done right now,” says Fair, speaking about the hotel market in general. “So far in 2009, we have closed a number of smaller deals with small business financing, but once you get above $5 million, the only deals we’ve gotten done have been with seller financing.”

In 2008, Jones Lang LaSalle Hotels provided sale, purchase and financing advice on over $3.7 billion worth of transactions for 120 assets located around the world. The firm has 32 offices in 19 countries.

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.