Marriott Announces First Real Estate Buy in Five Years
Date: June 2018
Location: Phoenix, Arizona, USA
Name: Sheraton Grand Phoenix
No. of Keys: 1,000
Seller: The 33-story Sheraton Grand Phoenix opened in 2008 and is located in the heart of Phoenix’s downtown, where more than $4 billion has been invested over the past six years in office space, retail, restaurants, educational facilities and convention space.
In June 2014, the city-owned Sheraton Phoenix Downtown Hotel had lost more than $28.2 million total — when city leaders say the hotel must be put in the hands of the private sector.
Brave move for a City to invest in hotels, done to underpin the city congress centre.
In 2016 Phoenix accepted a $300 million offer to sell the Sheraton Grand Phoenix hotel to a private owner, TLG Phoenix, a lodging-investment company.
Looks like that didn’t happen, until now – 2018.
Buyer: TLG Investment Partners and Concord Wilshire Capital announced today the acquisition of the Sheraton Grand Hotel located in Phoenix, Arizona for $255.0 million through an affiliate of TLG Phoenix, LLC.
Marriott International is the majority capital partner with TLG and Concord Wilshire and will be managing the asset.
TLG Investment Partners is a Fort Lauderdale based real estate investment firm headed by Leland Pillsbury and Christopher Nieberding, which invests in multiple classes of real estate including recreation, residential and commercial properties.
Concord Wilshire Capital is a joint venture partner with TLG Investment Partners. They are a national real estate development and investment firm headed by Nate Sirang, which specializes in hospitality and residential assets.
Marriott has plans for a significant renovation covering the downtown Phoenix hotel’s guest rooms and public space to transform the property into a cutting-edge model for the Sheraton brand.
“The hotel will provide a living and breathing showcase of our new vision for the Sheraton brand, underscoring our commitment to restore the brand to its leadership position,” said Arne Sorenson, President and CEO, Marriott International.
“Going back to Sheraton’s roots as being the heart of the community, the renovated hotel will showcase the brand’s new focus on services and design that enable socialisation, productivity and personalisation, featuring collaborative venues and technology that enable unique experiences.
The Sheraton Grand Phoenix will become a wonderful destination for locals and out-of-towners.”
The announcement comes as momentum builds for Marriott International’s transformation of Sheraton, the company’s most international brand since its purchase as part of the Starwood Hotels & Resorts acquisition in late 2016.
Earlier this month, the company revealed its comprehensive brand transformation strategy, creating a pop-up model lobby in New York City for owners, franchisees and other stakeholders to experience and evaluate first-hand.
Feedback on the new vision has been overwhelmingly positive, and Marriott International estimates that owners of Sheraton properties in the U.S. have already committed to invest more than $500 million to remodel Sheraton properties under the new standards.
While Marriott International remains committed to its asset-light business strategy, the company took a similar approach as it worked to re-position the Marriott Hotels brand five years ago.
The company purchased and renovated the Charlotte Marriott City Center, which then served as a living innovation hotel that helped engage owners to experience and develop the Marriott Hotels brand, enhance guest satisfaction and improve hotel profitability.
Like the Charlotte property, Marriott International expects to sell the Sheraton Grand Phoenix, subject to a long-term management agreement.
The Grand is also within walking distance to major sports teams’ venues and has played a role for national events that Phoenix has hosted including the Super Bowl, Final Four and large international conferences.
The hotel features about 77,000 square feet of meeting space, a business centre, a fitness centre, a fourth-floor outdoor pool with a poolside bar, as well as a lobby restaurant and bar. The company expects to commence renovations in 2019.
Price: US$255m
Price per Key: US$255,000
THPT Comment: Interesting move…as they say this is not a reverse of strategy…They did much the same when they launched the Edition brand in London and other locations.
First Seen: Hotel News Now