TEMPE, AZ – Constructed in 1987, an aging Days Inn-flagged hotel is slated to be renovated and rebranded over the next couple of years as reported by Zack Mishkin, Senior Vice President at ORION Investment Real Estate, who represented the Seller, Tempe Hotel Group, LLC, as well as the Buyer, Elliot West Hospitality, LLC, in this complicated lease-sale option-structured transaction.
Although the property’s actual ownership may not officially transfer for a couple of years, terms were reached this past week in a lease-sale option that is reportedly for in excess of $8 million of total consideration. Work will begin shortly by the new operator to renovate the 139 units.
“By structuring this transaction with a lease/sale option, we were able to achieve pricing of nearly $60,000 per key for the previous Owners. The structure of the deal afforded the Buyer time to put their transformation plan in motion. Ultimately, the Buyer will close on the deal and take advantage of the upside that this area offers as the property itself has very solid bones,” stated Mishkin.
The 139 unit hotel, includes a resort style pool, full-service elevator, laundry, vending and ice, a business center, large atrium/continental breakfast room, and a meeting room.
The 2.38 acre site is located in an amenity-rich and economically diverse area. While it is located in Tempe’s General Industrial District (GID) zoning overlay, it is also near the picturesque Ahwatukee Foothills and Pointe South Mountain communities, and Arizona Grand Resort & Spa and Golf Course. The property benefits from being in both an employment hub as well as a desirable residential area with a myriad of shopping and dining experiences.
The site is just one block west of Interstate 10, which runs through the heart of Phoenix providing convenient access to the entire Valley. The site is only 8 miles from Phoenix Sky Harbor International Airport, 6 miles from Arizona State University, 2.5 miles from Arizona Mills (one of Arizona’s largest malls) and walking distance to Starbucks and multiple dining establishments. Uniquely situated in a prominent convergence zone, the hotel is located on the boundary of Tempe, Chandler, and the Ahwatukee Foothills, which provides this rapid growth corridor with a very diverse demographics and a large and growing employment hub.
In addition to the “solid bones” of the property itself, it was the area that attracted the local buyer to this opportunity. Mishkin sums up the transaction with the old adage of “Location, location, location. This served as the driving factor for this sale. The property’s superior location provides the Buyer with strong visibility, a healthy income demographic and a bustling and walkable business setting. The Buyer plans to renovate and rebrand the hotel, taking advantage of the benefits this location has to offer. Once renovations are completed this will be a great opportunity for the Buyer and an improvement for the Community as a whole