A real estate investment trust in Dallas is buying two of Minneapolis’ most recognizable hotels for $101 million.
Ashford Hospitality Trust agreed to purchase the 229-room W Minneapolis Hotel-The Foshay and the 60-room Le Meridien Chambers Minneapolis, the company announced Friday.
Ralph Burnet, chairman of Coldwell Banker Burnet Realty in Edina, is the seller. He and his partners purchased the Foshay Tower in 2005 for $15 million, and in 2008 invested $75 million into a major renovation of the landmark building, the city’s tallest from 1929 to 1972.
He purchased the other hotel site in three separate parcels for about $30 million about the same time. Called the Chambers when Burnet opened it in 2006, Le Meridien Chambers is a sophisticated boutique hotel with more than 200 original pieces of art.
Both properties will continue to be managed by Starwood Hotels.
Ashford is paying $349,000 in cash per room for the properties combined. On the W, it is taking on about $56 million of mortgage debt due to mature in May 2023.
“We are excited about this transaction as it represents a remarkable opportunity to acquire two well-located hotels in the Minneapolis market, which is experiencing strong RevPAR growth,” said Monty Bennett, Ashford Trust’s chairman and chief executive.
RevPAR — revenue per available room — is the hotel industry’s primary measure of financial performance.
Le Meridien’s RevPAR for the past 12 months was $171 with an average daily rate of $201, according to a regulatory filing. Its 12-month occupancy hovered at nearly 85 percent.
The W Minneapolis had a RevPAR of $167 for the previous 12 months and an average daily rate of $203. It’s occupancy for the same period was 82 percent.
Bennett said both hotels are “in excellent physical condition” and will need few capital improvements.
“Further, with the expansion of demand drivers, including the highly anticipated addition of the New Minnesota Stadium, which is expected to open in 2016, we believe these hotels are well-positioned to achieve further increases in RevPAR,” Bennett said.
Burnet did not return requests for comment.
After founding Burnet Realty — which later became Coldwell Banker Burnet Realty — and making it one of the largest residential brokerages in the Upper Midwest, Burnet became an investor in commercial properties.
He and his wife became known for their extensive collection of contemporary art. During a stint as president of the Walker Art Center’s board of directors, Burnet helped raise nearly $100 million to expand the museum.