Dealmaker: Marcus & Millichap Closes $26M in Hotel, Retail Deals

Marcus & Millichap, Calabasas, Calif., arranged $15.9 million for two Apopka, Fla. hotel properties, an 81-room Hampton Inn & Suites and a 77-room Holiday Inn Express & Suites.

The portfolio changed hands for $17.1 million. Marcus & Millichap First Vice President of Investments Ahmed Kabani represented the seller and procured the buyer. Kabani said the sales price reflected both current performance and potential upside from the buyer’s $2 million property improvement plan, which was financed in the transaction.

The two interior-corridor hotels total 158 rooms, 13 miles from Orlando, Fla.

“The hotels have a combined room revenue of just over $5 million and great net-operating income to match,” Kabani said. “The sale underscores the strength of the Orlando hospitality market where high average daily rates and revenue per available rooms are attracting the interest of experienced hospitality property investors.”

Marcus & Millichap Director Robert Bhat arranged the financing. “These are strong-performing properties that provide access to Orlando’s major theme parks, the Amway Center, Wekiwa Springs State Park and numerous golf courses,” he said. “The assets were due for property improvements and Marcus & Millichap Capital Corp. was able to find a bank willing to provide funding for renovations with a blended 80 percent loan-to-cost.”

Marcus & Millichap also sold a 52,000-square-foot Super Giant grocery store and fueling station in Millsboro, Del. A publicly traded real estate investment trust paid the firmn’s Delaware development company client $10.2 million–$200 per square foot–for the freestanding asset.

Dean Zang, senior managing director investments in Marcus & Millichap’s Washington, D.C. office, represented the seller.

“The attractive credit of [Giant parent company] Ahold, coupled with a long-term lease, helped generate multiple offers,” Zang said. “The buyer was able to complete the transaction by quarter-end despite numerous complexities.”

Zang represented the same partnership when it sold the neighboring 31,000-square-foot shopping center and McDonald’s pad site in a separate transaction in 2009.