By Jack Stubbs
New York-based investment firm Blackstone Group has been active in the Puget Sound region in recent months, and the company recently added another hospitality property to its growing portfolio. On Wednesday, October 17th, the company acquired the 142-room Hampton Inn & Suites hotel in Federal Way for $33.5 million, or approximately $235,915 per room, according to public records filed with King County. The seller of the property, Royal Hospitality LLC affiliated with Koong Cho based in Rancho Santa Fe, California., acquired the property for $600,000 in August 2005, according to public documents.
Blackstone Group did not respond to requests for comment about the transaction in time for the publishing of this story.
The Hampton Inn & Suites, located at 31720 Gateway Blvd. S., contains 142 modern guest rooms and suites, according to the web site for the property, and also includes 1,596 square feet of meeting space and a 24-hour business center. The property also features a fitness center, convenience store and indoor pool.
The web site for the property emphasizes the hotel’s central location in Federal Way—roughly 12 miles northeast of Tacoma and 22 miles south of Seattle via Interstate-5—which is also located in close proximity to several attractions including Celebration Park, Point Defiance Zoo and aquarium in Tacoma and the Emerald Downs race-course in Auburn. The property is also approximately 5 miles from access to Washington State Route 167 and one mile east of the Hillside Plaza Shopping Center and downtown Federal Way.
Blackstone aims to to generate attractive risk-adjusted returns for its investors across cycles and over the long term. The company aims to acquire high-quality investments at discounts to replacement cost, then improving the properties through hands-on management and targeted value-add initiatives, according to the company’s web site. Blackstone’s portfolio spans asset types, including office, retail, hotel, industrial and residential properties. Blackstone is the largest real estate private equity firm in the world today with $120 billion of assets under management.
In mid-May 2018, LaSalle Hotel Properties announced that it had entered into a definitive agreement with affiliates of Blackstone Real Estate Partners VIII, under which Blackstone acquired all outstanding common shares of beneficial interest of LaSalle for $33.50 per share in an all-cash transaction valued at $4.8 billion.
Along with the recent hotel sale on Gateway Blvd., there have been a number of other transactions in Federal Way in recent months. In mid-July, DM Ventures Falcon LLC acquired two commercial buildings in Federal Way— East Campus Building A and East Campus Building B located at 33940 and 33930 Weyerhaeuser Way S.—totaling just over 130,000 square feet for $10.5 million from Fidelity REIT Investor LLC. And on August 23rd, Pyatt Broadmark Management announced the closing of a $21.6 million construction loan for the completion of an 8-building, 129-bed assisted living facility in Federal Way that comprises 86,260 square feet.