DTC hotel sells for less than half of what owner paid in 2016

This story first ran on BusinessDen.com, a BizWest news partner.

In the largest sale of a Denver-area hotel since the pandemic began, a 461-room property in the Denver Tech Center has changed hands for less than half the price it fetched in 2016.

The Hyatt Regency Denver Tech Center at 7800 E. Tufts Ave. last week sold to HRDTC Hotel Owner LLC, an entity affiliated with Ontario-based Westmont Hospitality Management. The sale price was $41.54 million, according to public records.

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That’s a 57 percent drop from when the seller, CP Denver LLC — an entity affiliated with Columbia Sussex Management — purchased the property. It paid $96 million in September 2016, records show.

Westmont and Columbia Sussex did not respond to separate requests for comment on Monday.

New York-based Square Mile Capital provided financing for last week’s deal, according to loan documents. The same firm also provided a loan for the 2016 transaction.

The Hyatt Regency has 451 rooms, according to the seller’s website. It is one of the 10 largest hotels in the metro area by room count. Within the DTC, it is second only to the Denver Marriott Tech Center. In 2019, the hotel announced the completion of what it called “a multi-million dollar renovation to its guestrooms, lobby and public spaces.”

Bloomberg reported in January that Kentucky-based Columbia Sussex was “shaping up to be one of the biggest losers in the pandemic lodging bust, as property owners who delayed debt payments grapple with impatient lenders.” The publication said three of the company’s 49 hotels were in foreclosure and the company was prepared to surrender two others to lenders.

The hotel industry has been battered by the pandemic, particularly properties in urban areas like the DTC that cater to business travelers.

In terms of local hotel sales since the pandemic began, the Hyatt Regency tops the $38.5 million sale in December of Hotel Indigo, a 180-room property by Union Station. That hotel was sold to McWhinney by its developer, however, meaning there was no previous sale to compare to.

Denver Assessor Keith Erffmeyer told BusinessDen last month that the government’s overall valuation of commercial property in Denver is set to decrease for the first time since the Great Recession. Hotels will go down the most on a median standpoint, he said.