Jamsan Hotel Management has acquired the former Holiday Inn Express at 440 Bedford St. in Lexington from Innkeepers USA for $6.4 million. As a result, the property has become a Quality Inn & Suites location.
A Massachusetts-based hotel company has added another trophy to its New England fiefdom, with Jamsan Hotel Management acquiring a 204-room operation in Lexington. The Holiday Inn Express was purchased for $6.4 million from Innkeepers USA, a Florida-based real estate investment trust.
The sale – which has already led to the property at 440 Bedford St. being reflagged as a Quality Inn & Suites – was consummated amid improving conditions for hotels, with greater activity and stabilizing room rates allowing regional operators to begin shaking off the difficulties of the past several years. A rebound that arrived in Boston and Cambridge last spring is now coursing through the suburbs, according to industry observers, even leading some to advance plans for new rooms. Cummings Properties is pursuing a hotel in Beverly, for example, while Vermont developer David P. Leatherwood is teaming up with a Kansas hotel firm to construct a 112-unit Residence Inn next to the Solomon Pond Mall in Marlborough.
“The suburban markets are improving at a brisk pace,” acknowledged David McElroy, a broker with CBRE/Whittier Partners and member of its National Hotel Group. McElroy, who teamed up with CBRE colleague Ronald Danko to negotiate the Lexington transaction, declined to offer details of that deal, but said he believes 2005 will yield a steady rise in hotel property sales throughout New England. “We expect to be very busy,” said McElroy, who recently brokered the sale of a downtown Boston building that is being converted into a hotel.
Jamsan President Dilip Patel declined comment on the Lexington deal when reached last week, but another official later confirmed that the purchase has been completed. While that asset does not yet appear, Jamsan’s Web site lists 13 hotels under its control, all in New England. The portfolio has three Fairfield Inns by Marriott, two Comfort Inns and four Super 8 motels, including one in Greenfield and another in Leominster. According to one source, Jamsan may be considering other changes at the Lexington operation, including the possibility of bringing in more hotel brands to the site, either by splitting the existing stock or via expansion.
‘At the Front End’
As for Leatherwood, the Vermont-based developer has been actively constructing hotels in Greater Boston during the past decade, including the Onyx Hotel in downtown Boston. As reported in last week’s Banker & Tradesman, the four-star Onyx is being sold for nearly $30 million, reportedly to another hospitality REIT, LaSalle Hotel Properties of Maryland. Just last month, meanwhile, Leatherwood and developer Lewis H. Wiens of True North Hotel Group formed a Massachusetts firm known as Marlborough Lodging Partners.
Efforts to contact Leatherwood by press deadline were unsuccessful, but Wiens told Banker & Tradesman in a phone interview that the entity hopes to build the Marlborough hotel as soon as it receives zoning approval, reviving a plan proposed by another developer prior to the area’s economic slide. Wiens, who has constructed Residence Inns throughout the country during the past 20 years, is no stranger to the Bay State, having developed the Residence Inn in Westford and another hotel at Fort Devens.
Bay State native Robert A. Walker is a partner in the Westford property, one that Wiens said outperformed the competition during the region’s steep downturn. And while concurring that New England’s hotel sector was battered by the recession and has taken longer to rebound, Wiens said that “we smell the market getting better,” as evidenced by his pursuit of the Marlborough project. The partnership does not plan to stop there, either, said Wiens.
“Marlborough is the first one out of the shoot, but we have some other properties planned in New England,” said Wiens, who is based in Overland Park, Kan. “We’re kind of at the front end [of the recovery].”
North of Boston, Cummings Properties Vice President Gerry McSweeney said the Woburn-based developer determined a hotel would be a complementary offering for Cummings Center, the massive mixed-use business park forged out of the former United Shoe Machinery factory in Beverly. Particularly with the dour office market, the need for new office space is low, said McSweeney, while the recent closing of Beverly’s only business hotel has increased demand for rooms.
“It would definitely be an amenity we could use,” said McSweeney, whose firm recently won zoning relief to allow a hotel of up to 140 rooms. Cummings is now looking for either a joint venture partner or an operator to run the hotel, said McSweeney. Given its ability to self-finance construction, Cummings is confident the property will get built, he said, with the firm now “putting out feelers” to identify partners. Also, to meet a need for additional conference facilities on the North Shore, Cummings anticipates building meeting space that could accommodate several hundred people, said McSweeney.
Wiens and McElroy said the return of business travel has paced the suburban hotel rebound, while McSweeney estimated that the Beverly property would receive a majority of its bookings from the corporate market. Research indicates that leisure travelers are also prevalent in that area, according to McSweeney, particularly in the summer and autumn, as well as to fill in gaps on weekends.
Joe Clements may be reached at jclements@thewarrengroup.com.
