A suburban St. Paul hotel that fetched nearly $13 million a few months before the pandemic has sold for a discounted price.
MA LAXMI HOSPITALITY, LLC of West Salem, Wisconsin, paid $11.3 million for the Hampton Inn at 436 Imperial Ave. N. in Oakdale, according to a certificate of real estate value made public Friday. The real estate document lists the seller as SW OAKDALE, LLC, of Irvine, California.
Finance & Commerce reached out to both parties for comment Friday.
The sale works out to $113,000 per room. The 100-key hotel is in the northwest corner of Imperial Avenue and Fourth Street North, about 11 minutes from downtown St. Paul and near the future Gold Line, a $505 million bus rapid transit project.
Real estate records show that the four-story hotel sold in October 2019 for $12.925 million. Finance & Commerce identified the 2019 buyer as Witness Group, a Columbus, Ohio, hotel investor.
Irving, Texas-based Patriot Hospitality developed the hotel, which opened in 2017. Finance & Commerce reported that the Texas entity paid $1.27 million for the development site when it was bare land.
Washington County currently values the property at $8.5 million for tax purposes.
The hotel includes an indoor pool, fitness center, business center and meeting rooms, according to its website.
Ted Leines, founder and CEO of Leines Hotel Advisors Inc. in Eden Prairie, said Friday that 2022 was a strong year for hotel sales, but he hastened to add that the rise in interest rates has affected pricing.
“At least with all of my clients, hotel revenue continues to grow at a moderate pace … but the change in interest rates has definitely impacted the prices that buyers are offering,” Leines said.
Leines said buyer activity has picked up since March and April, but “we’re not going to return to 2022 numbers because interest rates are higher and there are other risks in the economy that the lenders certainly have their eyes on.”
Speaking in general terms, Leines said some owners are motivated to sell because they became financially distressed during the pandemic. Labor shortages are also a factor as hoteliers are “getting exhausted” trying to maintain staffing, he said.
The Hampton Inn sale comes on the heels of a similar transaction in Burnsville.
Finance & Commerce reported in May that the 131-room Best Western Premier Nicollet Inn in Burnsville sold for $8.65 million, or $66,031 per room. The Burnsville property was built in 1984.
Endeavor Hotel Group, a hotel management company headquartered in Wichita, Kansas, acquired the Burnsville hotel from Blithe Hospitality LLC in Lakeville.
Last December, the Minneapolis Marriott Southwest at 5801 Opus Parkway in Minnetonka sold for $23.6 million, the second-biggest hotel deal of 2022. The per-room price of the 17-story, 323-key property was $73,065.
An entity related to Denver-based Sage Hospitality Group sold the Minnetonka property to a buyer doing business as MN Opus VII LLC.