Hunter Hotel Advisors recently advised on the sale of three MainStay Suites for Choice Hotels International in three secondary US markets: Nashville, Pittsburgh and Greenville, SC. All three hotels were acquired by regional investors, attracted to the extended stay model of prime location hotels. The total purchase price was $12.2 million, although the assets were sold individually. Athena Companies paid $4.6 million for the Nashville property, Shiv Hospitality paid $4.5 million for the Pittsburgh asset, while the Greenville MainStay was picked up for $3.1 million by Paragon Hotel Companies.
“Their robust interests in these assets reinforce the importance that investors place on strong locations even if they are in secondary markets,” said David Perrin, a senior associate at Hunter Hotel Advisors’ DC office and the broker of the transaction. According to Hunter Hotel Advisors, regional investors are fueling robust activity in secondary markets.
“Demand for well-located hotels in secondary markets is extremely high.” David Perrin told CPE. “Investors can produce high returns in markets other than New York and San Francisco, as long as the hotels are well positioned within the particular sub-market and they keep the property updated to compete with new supply.”
The new owners of the three recently sold properties are following this trend, planning full renovations to all rooms and public areas in order to upgrade the hotels to current Mainstay standards, which include a fully equipped kitchen, flat panel TVs and free high-speed internet.
The Nashville property currently features amenities such as a pool, fitness room and continental breakfast. The hotel, operating as MainStay Suites Brentwood/Nashville, comprises 100 keys.
According to David Perrin, Nashville is a prime example of a city whose suburbs are benefiting from an influx of investments to the city. “Nashville continues to be one of the hottest hospitality markets in the country,” Perrin told CPE. “Some are beginning to worry about the impact the large amount of new supply will have, but with the new convention center, a heavy focus on the Healthcare industry, and a strong University system, Nashville should not have a problem absorbing the new rooms coming into the market,” he added.
Images courtesy of Hunter Hotel Advisors and Ben Rose Photography