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REITs Buy Pair of Twin City Hotels

Chesapeake Lodging Buys Hotel Minneapolis for $46 Million; Summit Hotel Properties Puts Downtown Select Service Hotel Under Contract for Hyatt Conversion
November 1, 2012
Two real estate investment trusts, Chesapeake Lodging Trust (NYSE: CHSP) and Summit Hotel Properties (NYSE: INN), recently made major investments in the Minneapolis/St. Paul hotel market.

Chesapeake bought The Hotel Minneapolis, a 220-room Marriott Autograph Collection hotel in the Minneapolis CBD, for $46 million, or approximately $207,000 per room. The REIT plans to keep HEI Hotels and Resorts as the hotel manager continue its affiliation with Marriott under the Autograph Collection flag.

Located at 215 Fourth Street South, the 10-story hotel includes 22 suites, 6,000 square feet of meeting and catering space, the 250-seat Max Restaurant and Bar, a large business center, fitness center and approximately 12,000 square feet of leased tenant space, which accounts for more than 10% of the property's cash flow.

Meanwhile, Summit Hotel Properties plans to expand its relationship with Hyatt Hotels and purchase an undisclosed select serveice hotel in downtown Minneapolis that will be rebranded as the Hyatt Place Minneapolis Downtown following $20 million in capital improvements. The rebranding is scheduled for the summer of 2013.

The property will be the fourth Hyatt-branded hotel in the Minneapolis area.

Early last month, a Summit affiliate closed on the acquisition of seven Hyatt Place hotels and one Hyatt House hotel. Three of the properties were located in the denver area and one each was located in Baltimore, Chicago, Dallas, Phoenix and Scottsdale, AZ. Summit used a portion of the net proceeds from its recent stock offering to purchase the Hyatt portfolio acquisition.
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