Hilton Minneapolis, biggest hotel in Minnesota, sells for $143 million

The 821-room Hilton Minneapolis, the state's largest hotel, has sold for about $143 million.

DiamondRock Hospitality Co., the Maryland investment firm that has owned the 25-story hotel in downtown Minneapolis since 2010, sold it to another real estate investment firm "that has a long-standing relationship with the company," the firm said. It wasn't more specific.

As of Tuesday, there was not a certificate of real estate value that publicly documented the transaction. But the buyer appears to be Walton Street Capital of Chicago. Eric Mogentale, a principal at Walton Street Capital, said via e-mail that it was "involved in the investment." He didn't give any more details.

The hotel, on Marquette Avenue S. just a block from the Minneapolis Convention Center, was built in 1992 and is a fixture of the city's convention business. It has a 25,000-square-foot ballroom, big enough for 2,800 people, and has 35 meeting rooms.

"This is one of the premier convention hotels in the Midwest," said Kirby Payne, a hotel consultant and president of HVS Hotel Management in Newport, R.I. "It's an important hotel in the convention market."

DiamondRock renovated the hotel's rooms in 2014 and gave the lobby a face-lift in 2011. It employed about 400 people at the hotel.

DiamondRock, based in Bethesda, Md., paid more for the hotel — $155.5 million — when it bought it six years ago from an affiliate of investment company Haberhill in Potomac, Md., and Starwood Capital Group Global, a private equity group in Greenwich, Conn.

The Hilton Minneapolis last year yielded revenue per available room of $115.44, which was below the weighted average of its other properties, according to DiamondRock's annual report.

The building had an estimated market value of $139.2 million, according to Hennepin County property records.

The value of the latest transaction for the Hilton Minneapolis worked out to a value of about $174,000 per room. The record amount for a Minneapolis hotel property came in the 2014 sale of the Graves 601 Hotel to Loews Hotels and Resorts, a $65 million deal that worked out to about $255,000 per room.

Nicole Norfleet • 612-673-4495