In a Cleveland Plain Dealer article, H&LA’s David Sangree discusses the role of private equity in the hotel sector
CLEVELAND, Ohio — A downtown Cleveland hotel changed ownership this week, as part of what appears to be a larger sale by Concord Hospitality Enterprises of North Carolina.
Real estate records show that an investor group, identified only as Black Sapphire C Cleveland 2014 Inc., paid $19.8 million on Monday for the 194-room Hampton Inn on East Ninth Street. The seller was a company tied to Cleveland developer John Ferchill and Concord, a hotel owner and manager that was based in Northeast Ohio until 2003.
Corporation records filed in Delaware don’t reveal anything about the Hampton Inn’s new owner. Concord executives didn’t respond to requests for comment, and Ferchill couldn’t be reached Thursday or Friday. The hotel’s general manager didn’t return a phone call.
Delaware records turn up 14 similar newly minted companies, some of them tied to recent sales of other Concord hotels. One of those companies paid $12.5 million for a Courtyard hotel near the University of Dayton this week. Another paid nearly $24.4 million for a Springhill Suites near Ohio State University in early April.
Other companies bearing the “Black Sapphire” name reference Chicago, Dallas, Houston and Pittsburgh — all markets where Concord has a presence.
“There are a lot of private equity funds and institutional buyers out there in the hotel space,” said David Sangree, president of the Hotel & Leisure Advisors consulting firm in Lakewood. “There’s just a lot of money out there. Concord has been successful in pulling together groups of hotels and selling them as packages. This would appear to be one of those packages.”
Sangree said he wouldn’t be surprised if Concord hangs onto the management contracts for the Hampton Inn and other properties in the portfolio.
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