Interstate has formed a joint venture with an affiliate of Maryland-based Meisel Capital Partners to purchase the 147-room Radisson Hotel Cross Keys in Baltimore.The purchase is for $17.0 million from affiliates of The Blackstone Group. Interstate, which has operated the property since 1998, acquired a 15 percent minority equity interest for approximately $0.75 million, which includes its share of a planned $1.5 million upgrade and renovation to the hotel. Concurrent with the closing, Interstate executed a long-term agreement to manage the property.
“This is a high-quality, well-established property with an excellent location in a close-in, upscale Baltimore suburb,” said Thomas F. Hewitt, chief executive officer. “With this transaction, we continue to execute our strategy of diversifying our earnings base beyond management fees to include real estate ownership, through joint ventures and wholly owned acquisitions.
“This transaction also presented us with an opportunity to re-establish a management and investment relationship with Meisel Capital Partners, a long-time client/partner of Interstate for whom we have managed a number of assets, including the Reach and Casa Marina Resorts in Key West, Fla.”
“We’re delighted to partner with Interstate in this venture,” said Joel Meisel, principal of Meisel Capital Partners. “We have worked with them in the past and have the utmost confidence in their ability to maximize this hotel’s returns and help it further its leadership position in this market. They bring to the table a proven management track record, the many advantages of their size, and significant project management and repositioning experience.”
“This project has substantial upside potential, and we see a number of opportunities to enhance asset value,” said Leslie Ng, Interstate’s chief investment officer. “We believe the hotel will benefit from reconcepting and upgrading the food & beverage operation to take advantage of its location amid substantial retail and office space. Furthermore, our research anticipates minimal new supply in the market for the next three years, and this is the only full-service hotel within a five-mile radius. We will continue to selectively seek other acquisition opportunities that make economic sense and are consistent with our portfolio profile.”