Patriot American Hospitality Inc. yesterday announced plans to acquire the Hunt Valley Embassy Suites hotel for $15.6 million by the end of this week, its first acquisition since completing an initial public offering in late September.
The purchase of the 223-suite hotel by the Dallas-based real estate investment trust also marks the latest in a series of area hotel trades, spurred on by improving occupancy and room rates.
Since the start of the year, the Holiday Inn-Timonium, the Latham downtown, the Marriott Hunt Valley Inn and the Guest Quarters Suites hotel have all been sold to investors and pension funds eager to take advantage of prices below the amount needed to construct new hotels.
Two years ago, Patriot American, in conjunction with New York-based Apollo Real Estate Investments, spent $17.5 million to acquire the 702-room Omni Inner Harbor hotel downtown -- a 50 percent discount off the twin towers' cost in 1984.
"We're looking to buy properties in virtually every major market, and we consider Hunt Valley to be an attractive area," said Thomas W. Lattin, Patriot American's president and chief operating officer. "It's poised for growth, the operator knows the property well, and we think Embassy Suites is a leading hotel brand."
The hotel, at 213 International Circle, recently underwent a $1.8 million renovation -- a factor that also made it an attractive purchase, Mr. Lattin said.
He declined to project how much the Hunt Valley lodging property would contribute to future company earnings.
The 8-year-old hotel, sold by General Electric Capital Realty Corp., will be leased to Metro Hotels, the Dallas operating firm that has managed the property for three years.
With the purchase of the Embassy Suites Hunt Valley, Patriot American now controls 22 hotels. The average occupancy rate of those properties as of March 31 was 72 percent, generating earnings before interest, taxes and noncash charges of $9.7 million and revenues of $32.4 million in the first quarter, according to a prospectus filed with the Securities and Exchange Commission.