The historic Home2 Suites by Hilton Phoenix Downtown hotel, a charming mix of vintage and new in the heart of the city, changed hands recently, finding a new owner in Florida's Chatham Lodging Trust. According to an announcement on May 31, the real estate investment trust forked over $43.3 million for the 148-room extended-stay hotel. The property, nestled at 125 E. Jackson Street and a stone's throw from the Footprint Center, marries a nearly century-old landmark with a contemporary six-story addition, according to ABC 15.
Marking its first purchase in over two years, Chatham Lodging Trust is adding this exceptional acquisition to its portfolio—it’s the only one in Arizona. The trust's acquisition was partially funded by the proceeds from the $24 million sale of its Denver Tech hotel, with the rest covered by available cash, as mentioned in a Business Journal report. The new owners appear enthusiastic about their presence in downtown Phoenix, which they believe is on the cusp of a revival not dissimilar to those seen in other major urban centers over the past decade.
The centerpiece of the hotel is the Fuller Paint Company Building, erected in 1929, blending its historical charm with the needs of modern travelers. The brick and mortar of yore serve as the reception, a 1,200 square-foot meeting space, and Fuller’s Bar, while the shiny new tower houses the guest accommodations. The property is not just another building; it’s a testament to the melding of time periods, catering to a growing downtown area increasingly recognized for its potential.
Anish Hotels Group, the brains behind the project, brought the hotel to life through a development agreement and a government property lease excise tax agreement (GPLET) with Phoenix. At the helm of the transaction advisory were CBRE Hotels Institutional's Carter Gradwell, Jennifer Bergamo, and Rick Rush. Commenting on the project's vision, Anish Patel, vice president of Anish Hotels Group, expressed pride in the successful union of historical reverence and modern convenience,.
Chatham Lodging Trust, steered by CEO and president Jeffrey Fisher, forecasts the hotel to churn out revenue per available room north of $150 with an estimated 9% yield in net operating income. The hotel operations will be managed by Island Hospitality Management, a firm under Fisher's purview. The lease agreement with the city of Phoenix, linked to the GPLET, is inked until May 24, 2032—a span that provides a clear window for the anticipated flourishing of the Phoenix downtown lodging market.
