Fort Smith's highest grossing hotel is back under local ownership and millions of dollars in renovations are planned for the facility, according to its new owners.
The 178-room Hampton Inn and Suites, located at 6201-C Rogers Avenue, had been put up for sale by Austin, Texas-based Summit Hotels for an asking price of $12 million, according to Storm Nolan, a partner in Fort Smith-based CSK Hotels.
"We've actually been interested in the Hampton for a long time and tried to buy it years ago," he said, adding that the sale of the hotel was completed Tuesday (Sept.9).
Summit Hotel Properties said in a Wednesday (Sept. 10) press release that the property sold for $8.8 million.
"It was owned by a publicly traded REIT based in Texas and so when they were ready to sell we happened to be the one they selected," he added.
For Nolan, the purchase of the hotel will be his company's 15th hotel project to be involved in and adds a third property to the company's portfolio. The other properties under DSK ownership include a hotel under the Marriott brand in Little Rock and a Choice Hotel-branded property in Texarkana, Texas.
The reason for purchasing the Hampton Inn property in Fort Smith, Nolan said, was partly because of the corporate branding associated with Hampton.
"Hampton is in the Hilton family (with) HHonors Rewards," he explained. "Business travelers love that system. As such, Hilton does a good job of making sure the properties are well maintained and part of our plans include a $3 million renovation."
According to Nolan, the renovation will include a complete top to bottom re-do of guest rooms, as well as an update to the facade of the hotel which he said will provide a "well designed, modern hotel experience" in the Fort Smith market.
Renovations are expected to begin between the end of this year and mid-2015 with a scheduled completion date of "the end of next year," he said.
Nolan said financing for the hotel's purchase and renovations was provided by Fort Smith-based Benefit Bank. For Nolan and business partner Kane Whitt, adding the hotel to its list of Fort Smith-owned and managed properties will allow them to focus their efforts locally.
"It just complements some of the other businesses we already have," Whitt said, adding that one of the company's local investments is ownership and management of Green Pointe Shopping Center on Rogers Avenue in Fort Smith.
Nolan said the purchase of the hotel was not simply about the numbers making sense, but also about positively impacting the local economy, noting that the hotel's general manager Henry Perez is on the city's A&P Commission and other hotel staff are involved in community non-profits.
"As far as why (we invested in this property), we're based in Fort Smith so it is in our hometown. This will make our 15th hotel project. Based on the numbers they're doing (with $4.1 million in annual revenues), it looked like a good investment for us. We're kind of excited. We know a lot of business people in Fort Smith and to take a hotel from Wall Street ownership to local ownership will resonate well with locals, local travelers and people referring other travelers to the area."
The hotel employs 40 staff, with Nolan adding that the levels would not increase for the foreseeable future.
The share price of Summit Hotel Properties (NYSE: INN) closed Wednesday at $10.51, down six cents. During the past 52 weeks, the share price has ranged from an $8.50 low to an $11.09 high. The company has 90 hotels with 11,380 rooms in 21 states.