The hotel market in downtown Minneapolis continues to pick up steam, with two hotels sold this week and one of them planning a multimillion-dollar renovation.
Maryland-based Chesapeake Lodging Trust said Tuesday that it has acquired the 222-room Hotel Minneapolis for $46 million, or about $207,000 per room. The former Midland Bank, 215 4th St. S., is part of the Marriott Autograph hotel collection -- unique lodging with a "boutique/lifestyle" feel.
The real estate investment trust entered into an agreement with a subsidiary of HEI Hotels and Resorts, the hotel's current operator, to manage the property. The Marriott affiliation also will continue.
The 10-story property includes 22 suites, 6,000 square feet of meeting and catering space, the 250-seat Max Restaurant and Bar, business and fitness centers and about 12,000 square feet of leased tenant space.
"While we don't value the tenant cash flow separately from the hotel's operations, these spaces enhance the cash flow of the property by over 10 percent," James Francis, the trust's president and CEO, said in a statement.
The hotel was redeveloped by Hempel Properties of Maple Grove and St.Paul-based Morrissey Hospitality Co., which purchased it in 2006 for $11.2 million.
The 1906 bank building features marble floors, panels and columns, plus ceilings adorned with detailed, hand-carved plaster ornamentation. Original bank vaults were incorporated throughout the design, including "Audrey's Vault," the original bank cashier's vault, which now is a centerpiece for the hotel's catering service and wine cellar.
"This is truly a special property and [an] excellent addition to our portfolio," Francis said.
Chesapeake Lodging Trust says it focuses on investments in "upper-upscale" hotels in "major business and convention markets." The trust currently owns 15 hotels nationwide.
A few blocks away, an affiliate of Hyatt Hotels Corp. bought the Comfort Suites at 425 S. 7th St., with plans to sink $20 million into renovating it. The hotel will ultimately be rebranded the Hyatt Place Minneapolis Downtown by next summer.
Once the work is complete, Summit Hotel Properties Inc. of Sioux Falls, S.D., will purchase the hotel and enter into a management agreement with Hyatt.
Terms of the deal were not disclosed, said Dan Boyum, vice president of investor relations for Summit.
The firm, which owns 81 hotels nationwide, has two properties in Minnesota, the Hampton Inn & Suites and SpringHill Suites, both in Bloomington.
Janet Moore 612-673-7752