In one of the largest hotel acquisitions in Washington, D.C. history, the Canyon-Johnson Urban Fund and Lowe Enterprises Investors have announced the purchase from Hilton Hotels Corporation of the iconic Hilton Washington hotel near Dupont Circle for $290 million.The new ownership team will invest in excess of $100 million in a top-to-bottom renovation of the legendary hotel that has been the site of prestigious gatherings hosted by U.S. presidents, world leaders and other prominent figures since opening in 1965. The CJUF/Lowe Enterprises joint venture have entered into a long-term management agreement with Hilton Hotels Corporation.
The Hilton Washington’s major equity investor, the Canyon-Johnson Urban Fund, is a joint venture between Canyon Capital Realty Advisors and basketball-legend-turned-urban-entrepreneur Earvin “Magic” Johnson. Based in the Los Angeles area, Canyon-Johnson is one of the largest private real estate funds focused on the development and repositioning of urban properties in the U.S. Los Angeles-based Lowe Enterprises is a leading national real estate investment, development and management firm with extensive experience in the hospitality industry.
“This investment goes to the very heart of what Canyon-Johnson is all about,” said CJUF Managing Partner Bobby Turner. “The hotel is located in a densely-populated, urban neighborhood and employs hundreds of people. By deploying the expertise and capital necessary to redevelop this important asset, Canyon-Johnson and Lowe Enterprises are setting the stage for strong economic and community returns in one of America’s most recognized urban centers. We couldn’t be more pleased to work with Lowe Enterprises, a company that has impressive expertise in the hospitality industry and detailed knowledge of the Washington, D.C. real estate market.”
“Our team is breathing new life into this irreplaceable and historic property in the nation’s capital,” said Earvin “Magic” Johnson. “We look forward to working in partnership with Mayor Adrian Fenty and local leaders to ensure that the Hilton Washington continues to be a valuable economic development engine for decades to come.”
Set on five acres and located on Connecticut Avenue near Dupont Circle, the Hilton Washington is in the heart of one of the area’s most desirable and distinctive shopping, dining and residential neighborhoods. Its proximity to government and cultural institutions also makes it a premier destination for both business and leisure travelers. Beyond its 1,119 rooms, the hotel has 110,000 square feet of meeting space, including the signature 36,000-square-foot International Ballroom, the city’s largest hotel ballroom.
“The Hilton is a classic property in a prime location. It offers a solid acquisition opportunity in a market we know well and is another in a series of high profile hotel properties that we have acquired in major U.S. markets this year,” said Brad Howe, managing director, Lowe Enterprises Investors. “Our extensive hospitality experience and strong local team provide us with the ability to enhance the value of this legendary property in the heart of Washington, D.C.”
Executives from Lowe Enterprises already have developed and will oversee the extensive renovation program set to begin in the third quarter of this year. The effort will be led by Michael Balaban, Washington, D.C.-based president of the eastern division of the firm’s Real Estate Group, and Charlie Peck, president of Destination Hotels and Resorts, the firm’s hotel management affiliate, who will lead the asset management team for the hotel.
Highlights of the scheduled renovation include:
- Updated guest rooms with fresh décor featuring new color schemes, window treatments, floor and wall coverings, linens, fixtures and bathrooms. Complementary design schemes will be introduced throughout the public spaces, including meeting rooms and a richly refurbished grand lobby.
- The 110,000 square feet of meeting and event space, which features the 36,000-square-foot International Ballroom, will be reconfigured to accommodate multiple groups and events simultaneously. Meeting spaces will be renovated to include new pre-function exhibit space, storage, kitchen and restroom facilities.
- Extensive modifications will be made to the gym and pool areas. The existing 1,200-square-foot fitness center will be reconfigured to include a spacious spa to be located adjacent to the junior Olympic swimming pool and sundeck
- Food and beverage options will also be enhanced with the addition of a coffee bar and the possible addition of an upscale restaurant made possible by reconfiguring existing space.
“We couldn’t be happier working with the Lowe Enterprises team on this dynamic project,” said CJUF’s Quincy Allen, senior director, acquisitions. “Lowe Enterprises has assembled an incredible team with a wealth of talent and experience in hotel renovations and a deep understanding of the Washington, D.C. market. With the combined experience of Canyon-Johnson and Lowe, we are well suited to the task of refurbishing this tremendous property and re-establishing it as a premier destination hotel. This is one of several projects that Canyon-Johnson will be announcing in the coming months in other emerging markets of Washington, D.C.”
“The Hilton Washington has long been a favorite venue for celebrated functions in the Nation’s capital including numerous annual events attended by the President. We are pleased the hotel has been purchased by a very experienced partnership that will implement the renovations necessary to restore the property to its full potential,” said Robert M. La Forgia, executive vice president and chief financial officer, Hilton Hotels Corporation.
Lowe Enterprises’ acquisition team was led by Harmar Thompson, senior vice president of Lowe Enterprises Real Estate Group and Mike Everett, senior vice president of Lowe Hospitality Group. Pillsbury Winthrop and Sidley Austin LLP provided legal services to Lowe and CJUF. The acquisition and renovation loan is being provided by Prudential Mortgage Capital Corporation. Eastdil Secured represented Hilton Hotels Corporation in the transaction