By Jack Stubbs
The growth of the hotel market in Seattle—and throughout the Puget Sound region more generally—has provided firms of varying sizes ample opportunity to invest in hospitality assets throughout the region, with several transactions having occurred in areas like SeaTac, Federal Way and Auburn in recent months.
On September 26th, a Holiday Inn Express in Auburn sold for $10 million, or about $83,333 per room, King County records show. The buyer was Palma Investment Co LLC based in Auburn, and the seller was LC & L DAEBAK Inc., an entity also based in Auburn.
The Holiday Inn Hotel & Suites, located at 507 C St. SW, is a five-story structure that comprises 120 rooms and sits on just under three acres, according to the property listing on loopnet.com. The hotel offers guests access to various amenities including an indoor pool and fitness center, and an 18-seat meeting room and business center.
Located adjacent to the Outlet Collection Mall at 1101 Outlet Collection Way—a retail complex home to tenants like Bed Bath & Beyond, Nordstrom Rack and Burlington—the hotel offers convenient access to Highway 18 and downtown Auburn. The property is also under twenty miles south of SeaTac and five miles from downtown Federal Way, two cities where other hotel properties have changed hands over the last few quarters.
In April 2019—at a time when Seattle-Tacoma International Airport continues its plans for expansion and hotels south of downtown Seattle continue to attract interest from investors—the the Comfort Inn & Suites SeaTac sold for $17.9 million to Seastar Hotel Investment LLC, a private entity associated with Binchi Zhang of Bellevue.
In mid-July, the Red Lion Inn & Suites hotel in Federal Way sold for $9 million, or roughly $100,000 per room, with Shreeji Investement LLC based in Federal Way acquiring the property from Jabez Enterprises LLC.
Just south of Federal Way in downtown Tacoma, a new Marriott-brand hotel at 1500 Commerce Street is currently underway and set to be complete in 2020. Ankrom Moisan Architects designed the $120 million-dollar Marriott hotel, the newest high rise in downtown Tacoma—the 24-story, 300-room property, known as The Tacoma Convention Center Hotel, will also include a rooftop pool and two-story ballroom, and is expected to address the shortage of beds for visitors drawn to the surrounding area and the Greater Tacoma Convention Center.
Further north in Seattle, Lake Union Properties converted the early 20th century-era Eitel Building—sitting at the corner of Second Ave. and Pike St. within the Central Business District—into a boutique 7-story hotel property, which officially opened earlier this Spring.
Along with the various transactions that have occurred in recent months, investors and developers are looking to successfully integrate historic elements of existing properties into new projects. The design team involved with the Eitel Building transformation had to stay respectful of the property’s history, given its prominent location near the iconic Pike Place Market—upgrades to the exterior of the property had to adhere to guidance provided by the Seattle Landmarks and Preservation Board and included refinishing the brick façade, re-construction of the original street-level storefronts and the addition of an entry canopy.
