Home AEC 90-Key Red Lion Inn & Suites in Federal Way Sells for $9MM...

90-Key Red Lion Inn & Suites in Federal Way Sells for $9MM During Dynamic Time for Local Hospitality Market

Seattle, Ankrom Moisan Architects, Pacific Eagle, Early Design Guidance, Landmark Preservation Board, Red Lion Inn & Suites
Image courtesy of Red Lion Inn & Suites.

By Jack Stubbs

On July 23rd, in a transaction which recently was recorded, the Red Lion Inn & Suites hotel in Federal Way sold for $9 million, or roughly $100,000 per room, King County records show. The buyer was Shreeji Investement LLC based in Federal Way, and the seller was Jabez Enterprises LLC, also based in Federal Way. 

Jabez Enterprises LLC purchased the 90-room hotel property in March, 2017, from Sandhu NW Hospitality LLC for $8.8 million or about $97,778 per room, according to The Registry’s reporting. At the time of the transaction, a breakdown in cost for the property consisted of an allocation of $1.2 million for the land—roughly three-acres—and $7.425 million for the building itself, according to public documents.

Paul Sandhu of Sandhu NW Hospitality LLC converted the hotel to a Red Lion Inn & Suites in 2014, according to a Red Lion press release. Sandhu NW Hospitalty LLC invested $2 million in improvements the the guest rooms and also upgraded the public space on the property. 

Originally but in 1982, the hotel is roughly four miles south of downtown Federal Way and about ten miles northeast of downtown Tacoma, also offering convenient access via I-5 to various local attractions including the Weyerhaeuser-King County Aquatic Center, Tacoma Dome, and Sea-Tac Airport. 

The selling price of $9 million slightly less than that paid for another Red Lion Inn & Suites—located north of downtown Seattle in Bothell—last fall. In August 2018, P&J Investors LLC acquired the 84-room Red Lion Inn & Suites in Bothell located at 3850 Monte Villa Parkway for $9.5 million, or approximately $113,095 per room, from CGCMT 2008-C7 Monte Villa Parkway LLC. 

In January 2019, a 118-room Comfort Inn Hotel in Federal Way—located at 31622 Pacific Hwy S., about three miles north of the Red Lion Inn & Suites property—sold for $15 million, or approximately $127,118 per room, with Richard & Partners LLC acquiring the property from Bellevue-based Song & Sons Inc. 

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. 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. 

Downtown Seattle, in particular, continues to be a hotspot for developers looking to adaptively reposition existing historic buildings as hotel properties. The Hahn Buiding right across from Pike Place Market, which has been standing since the market’s founding in 1907, will be demolished to make way for property owner Stellar Holdings’ 14-story commercial property, which will include a 154-key hotel and commercial space. In late June 2019, the design team—which includes Seattle-based Ankrom Moisan, Graham Baba Architects and HEWITT’s Landscape architecture team—was given the green light to proceed, with conditions, with its plans the project at a Design Review meeting. 

The recent approval marked the latest chapter for the site at 103 Pike Street: the City has twice rejected landmark nominations submitted by the Seattle community, first in 1999 and again in 2014, stating that the building lacked significant associations, architectural characteristics and the prominence necessary to earn landmark status. At the most recent meeting, community members expressed their concerns about how the project team had taken steps to ensure that the new development would fit into the surrounding historical context of Seattle’s ever-evolving Central Business District. 

On July 23rd, developer Pacific Eagle, along with Ankrom Moisan Architects and Berger Partnership, received approval at an Early Design Guidance meeting for a new mixed-use, 42-story tower at 1932 2nd Ave., which will include a ten-story hotel with 240 keys. Similarly to other the design team will have to give special consideration to the historic features of the site. 

Seattle, Ankrom Moisan Architects, Pacific Eagle, Early Design Guidance, Landmark Preservation Board, Red Lion Inn & Suites
Rendering courtesy of Ankrom Moisan Architects.

The property is currently home to the Terminal Sales Annex building, a designated Seattle landmark and whose façade and structure will be incorporated into the new development. The tower will rise upward from the Terminal Sales Annex in a series of steps, creating a telescoping massing. Each tier of the telescoping form will wrap around the building, while the final and tallest tiers will be located to the north.

“We have been working closely with the landmarks preservation board for this project and to incorporate into this landmark structure,” explained Ankrom Moisan’s Jennifer Sobieraj Sanin at the EDG meeting. “One thing that is really important is the volumetric expression of the Terminal Sales Annex all the way through the site.”