Taking advantage of the hard times for hotels, a group of East Coast real estate investors has scooped up the troubled Northland Inn in Brooklyn Park, promising a substantial renovation.
The buyers -- Hotel Asset Value Enhancement Inc., a hotel investment advisory company in Providence, R. I., and Fidelity Real Estate Group, a unit of Boston-based Fidelity Investments -- announced the sale Friday but wouldn't disclose the purchase price.
There was a balance of $20.5 million on the loan on the property, according to commercial real estate researcher Trepp LLC in New York. The loan had gone back to the lender and was being handled by Helios AMC, a special servicer and distressed asset manager in San Francisco. Helios AMC confirmed Friday that it sold the Northland Inn.
The 231-room meeting hotel, originally developed by James Stuebner, president Parkland Hotel Investors LP, went into foreclosure last year. It employs about 135 people and sits at the intersection of Interstate 94 and Hwy. 169.
Hotel Asset Value Enhancement's sister company, StepStone Hospitality, has taken over management of the property.
"The foreclosure created a lot of uncertainty and it impacted the customer base at the time," said StepStone President Blair Wills. "We're looking forward to meeting those past customers and trying to bring them back to the property."
Wills said the company plans to make a substantial investment in the property but wouldn't elaborate, saying the property is still being evaluated.
Wills said they haven't decided whether to re-brand the hotel or continue to operate it as an independent.
Amy Baldwin, the City of Brooklyn Park's business developer, called the purchase good news.
"It brings a lot of folks into the community," Baldwin said of the hotel.
The Northland Inn is just the latest hotel to sell around the Twin Cities as the sector both struggles from the battering it took in the downturn and enjoys some notable investor interest.
Among the lodgings that have changed hands in the last seven months: the Grand Hotel Minneapolis and the Radisson Hotel and Water Park of America in Bloomington, which were both owned by Minneapolis-based Wirth Companies, as well as the Hilton Minneapolis and the Hotel Minneapolis.
Adam McGaughy, an executive vice president for Jones Lang LaSalle Hotels in Chicago, who handled the deal, said there's a strong investor appetite for full-service hotels in the Twin Cities. He said other "strategic dispositions" are underway.
Jennifer Bjorhus • 612-673-4683