Situated in the core of Minneapolis’ entertainment district, the Graves 601 Hotel Wyndham Grand sold to a New York-based upscale hotel chain for $65 million.
Loews Hotels & Resorts said Monday it will pump about $7 million into the 255-room hotel at 601 1st Av. N. Spokeswoman Sarah Murov said details of the renovation are still being fine-tuned, but the project will focus on guest rooms, meeting space, lobby and lobby bar. The 22-story building has already been rebranded as the Loews Minneapolis Hotel.
Part of a $15 billion conglomerate, which also includes energy and insurance subsidiaries, Loews has been bolstering its presence in the Midwest with two hotels in Chicago, and now the former Graves 601.
Loews recently announced the purchase of the 556-room InterContinental Chicago O’Hare Hotel, and plans to build a 400-room hotel in downtown Chicago. All told, Loews has 21 hotels and resorts in the U.S. and Canada.
Paul Whetsell, president and CEO of Loews Hotels & Resorts, said in a statement that the Minneapolis property is a “great addition” to the company’s portfolio. “There are exciting new developments in Minneapolis, including the Block E area, and having our hotel in such a key Midwestern destination is a tremendous plus for the growth of our brand,” he said. “The property is in great physical condition, with the renovation targeted to further enhance the guest experience.”
The hotel, opened by Twin Cities businessman Jim Graves in 2003, was initially affiliated with the Le Meridien chain and part of the Block E retail-entertainment complex. Since then, Block E has foundered but is now undergoing a $50 million overhaul into Mayo Clinic Square, a sports medicine clinic and a practice facility for the Minnesota Timberwolves and Lynx.
Recently, one of the remaining businesses in Block E, Shout House Dueling Pianos, announced plans to move to the first floor of the former Epic nightclub a few blocks away. Owner Joe Woods said the nightclub’s lease is set to expire in October after a decade and the former Epic space is bigger and more suitable for expansion.
Remaining businesses in Block E include Kieran’s Irish Pub, Starbucks and Jimmy John’s subs.
Since the Great Recession, the downtown hotel market has seen a number of changes, as occupancy rates and room prices increase. Part of the current demand for hotels is being driven by access to credit as out-of-town lenders and institutional investors look for opportunities.
Recently, the stalwart Radisson hotel on 7th St. S. was rebranded as an upscale Radisson Blu concept, part of a $28 million renovation. However, the developer of the $400 million Downtown East mixed-use complex said last month the hotel component of the project, a Radisson Red concept, is no longer part of the project.
Mortenson Development of Golden Valley is building a $37 million 200-plus room Hampton Inn & Suites at 1st Av. and Eighth St. S., and plans to sell it to Texas-based Summit Hotel Properties for nearly $38 million. And Summit Hotel Properties also purchased the Hyatt Place hotel on 7th St. S. for $32.6 million, investing $20 million to upgrade it.
According to a certificate of real estate value filed last Thursday, an entity associated with Loews Hotels & Resorts has taken on a $34 million mortgage to buy the hotel. Of the $65 million spent to purchase the property, $51 million went toward the building, and nearly $3 million for furniture, fixtures and equipment, documents state.