WASHINGTON, D.C. | Thayer Lodging Group, an Annapolis, MD-based private equity real estate investment firm, announced it has sold the Marriott Wardman Park, Washington's largest hotel, to The JGB Companies and its partner the CIM Group for $300 million, believed to be a record price for a Washington hotel.
Separately, Thayer Lodging Group also closed the sale of its Thayer Hotel Investors II Fund to Pyramid Hotel Opportunity Venture Fund of Boston, capping another successful series of transactions for the investment firm.
"These sales represent liquidations of two funds in a manner consistent with our holding period expectations and our investment strategy at prices that are extremely attractive," said Thayer co-founder Frederick V. Malek. "In particular, the sale of Wardman Park, capitalizes on pricing that is reflective of the best performing major hotel market in the US."
Marriott Wardman Park
The Wardman Park sale marks the end of an investment that has come full-circle. Thayer purchased the hotel in January 1999. Recognizing the hotel's long-term viability, along with Marriott International, it continued to invest in the financial structure of the hotel through the significant decline in tourism following the tragedy of September 11, 2001, which included a 40-day stretch at 4% occupancy and cancellations of significant conferences. Despite these challenges, the investment generated a 2.4 times the return on invested equity and a 17% compound return.
The Marriott Wardman Park is one of the country's leading convention and large meeting hotels. Built in 1918 and located on 16 acres of property at Woodley Road and Connecticut Avenue in Northwest Washington, DC, the Marriott Wardman Park Hotel is one of the city's most prominent and historic hotels. With more than 1,330 guest rooms, it is within walking distance of the National Zoo and close to the downtown central business district, tourist attractions and National Airport. It is comprised of the 202-room Wardman Tower, the 933-room Center Tower and the 199-room Park Tower. It includes more than 173,000 square feet of flexible meeting space and an on-site Metro stop.
Eastdil Realty was retained by Thayer as an adviser on the deal and Marriott International will continue to manage the property.
Thayer Hotel Investors II
Thayer Lodging's sale of its portfolio, Thayer Hotel Investors II, a private equity fund launched in 1995, to Pyramid marks another highly successful investment for the firm, yielding two times the return on invested equity and a 29% compound return.
The portfolio sale included eight hotels totaling more than 2,200 hotel rooms nationwide. The portfolio includes: DoubleTree Hotels in Fort Lauderdale, New Orleans, Washington, DC, and Somerset, New Jersey; the Austin Crowne Plaza; Sheraton Suites Plantation in Florida; and the Maison DuPuy Hotel in New Orleans. The Maison DuPuy and its gourmet restaurant, Dominique's, were managed by Thayer as well as the Crowne Plaza, while the remainder of the portfolio is managed by DoubleTree and Sheraton.
"We are quite pleased with the results of these investments, particularly the yields we've produced for our investors," said Managing Director Martin A. Reid. "These sales will allow us to focus more exclusively on investing the uncommitted capital in our current $238 million hotel investment fund, Thayer Hotel Investors IV."
David J. Weymer
Thayer Lodging Group
410 Severn Avenue, Suite 314
USA - Annapolis, MD 21403