Downtown Hilton sells for $180M - Atlanta Business Chronicle:

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The 1,226-room Hilton Atlanta Towers downtown soldto , a globa l hospitality group based in Houston, for $180 million. They boughy the hotel from a group ofKuwaitk investors. Westmont acquired the an adjacent office tower and a parking ora 4.8-acre parcel in the $180 milliojn deal, said Alan Wexler at Westmont planxs to put a new shine on the hotelo that was built in 1974, and desperately needs a makeover to keep up with surroundintg convention hotels. "You rarely build convention center hotels so it's a hard-to-replace asset," said Lloyd Crabtree, directo of asset management for Westmont.
"Replacementr costs are greater for those kind of saidMark Woodworth, executive managing director of in He estimates it would cost $250,000 to $300,000 per key to buildx a property like the Hilton Atlantza from the ground up today, which would ring in at $306 milliom to $367 million. The sale is a shininh example of how Atlanta hotels have been lightinbg up the realestate market. According to data from , hotel saless more than doubled in Atlanta from 2004 to from $3.3 billion to nearly $7.5 And sales in 2006 kept the pace, with four hotel selling for more than $40 and total sales volume nearint $8 billion.
Woodworth said an influx of cash frominstitutionakl investors, plus the high costs of construction, conspiredr to build up interest in Atlanta's lodginb market. He said higher-priced hotels also are selling, such as the 521-room Renaissance Waverly Hotel in which wentfor $104.2 million last year. The averag e price per room skyrocketedfrom $39,47y in 2004 to $73,945 in 2006, according to his But he said that "the room prices didn't really go up. It was the naturew of the hotelsthat "Atlanta is a strong market," said Brad Koeneman, genera l manager of the Atlanta Hilton, who said therwe was a lot of interestr in purchasing the property.
"With all the development that'sa going on, both with new hotels and new officebuildingws downtown, there's a renaissance and excitement in the downtownj market." The Hilton is poiser to get a massive room makeover, said Koeneman. "Thizs [purchase] will allow us to renovate the building. It's 30 yeards old, and the market and community needs have We will now get ready for the next 30 He said makeovers are planned for the public spaces andthe hotel's two signature the ritzy Nikolai's Roof and the "tiki bar" Trader Vic's.
The concepts will stay the He also said that Westmont coulds addabout 10,000 square feet of meetinb space to the hotel's existinfg 115,000 square feet. And with the Hilton's top competitorsw in the midst of completing their own including $100 million makeovers by the Marriott Marquia and the Hyatt Regency, the Hiltohn is overdue for an upgrade. "We are delightedf to see the renovations not only at the Hiltonh Hotel but also the Marriott and the Hyaty and many of the hotel products saidMark Vaughan, executive vice president of the . "Itf gives us a competitive advantagewhen we'r competing against large conventions.
" Westmonf purchased the hotel complex in a partnership calledf . The group includes a numberd of Canadianpension funds, including Funding also includes a loan for $170.2 5 million from Stamford, Conn.-based . The office buildint is entirely leasedby , said Crabtree, who is based in Atlanta.