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Partridge Inn on Walton Way one step closer to new owners

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The historic Partridge Inn is one step closer to new ownership.

A $4.25 million online bid made on Auction.com has been approved by the seller, Miami-based LNR Partners LLC, a commercial mortgage special servicer.

The closing date has been tentatively set for Aug. 18, said Hunter Hotel Advisors Chief Operating Officer Lee Hunter, who is handling the listing for LNR Partners.

“Things are progressing forward,” Hunter said Thursday. “Normally it’s a two-and-a-half-month process, so this is going to go very quickly.”

On June 18, an online auction for the hotel at 2110 Walton Way ended at $4.25 million after 16 bids were placed during a two-day period. The sellers had about a month after the auction to make a decision on the sale.

The name of the top bidder has not been made public, but Hunter said the investment company that won the auction is based in the U.S. and likely will keep the property operating as a hotel. The boutique inn also had garnered interest from groups in western Europe and southeast Asia, he said.

The five-story hotel includes 144 guest rooms and suites, 10,000 square feet of meeting and event space, a courtyard pool, and The P.I. Bar and Grill.

According to city records, the 1.3-acre property has a market value of just below $12 million. The auction listing showed the hotel generating more than $3.9 million in total revenue last year.

HISTORY

The landmark building was originally built in 1836 as a personal home and was converted into The Partridge Inn in 1910.

After the late 1940s, the property entered a period of disrepair for nearly four decades. In the late 1980s, after facing demolition, the building was gutted and rebuilt.

In 2005, Walton Way Hotel LLC purchased the hotel for $8.1 million. The owners spent about $5.6 million on renovations just a year later. In July 2011, the entity defaulted on a $16 million loan and Walton Way Limited Partnership, the original lender and shell company for the group that owned Walton Way Hotel LLC, purchased the property in a foreclosure sale later that year.

LNR Partners LLC was brought in after the 2011 foreclosure to return the hotel to a stable footing.

Before the June auction, the property was pulled twice from Auction.com in 2013 and this May.

Comments (17) Add comment
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raul
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raul 07/24/14 - 01:54 pm
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The sellers took a shelacking

The sellers took a shelacking at 4.25 million.

Butterman
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Butterman 07/24/14 - 02:28 pm
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Moneypit
Unpublished

Ever see the movie with Tom Hanks and Shelly Long? This place reminds me of that. I think for this place to ever produce revenue, uses besides a hotel must be considered. I am thinking condos might be an option.

corgimom
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corgimom 07/24/14 - 02:42 pm
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Pouring money down a rat hole

Pouring money down a rat hole comes to mind.

Butterman, the Partridge Inn has the "residents" of the Bon Aire right across the street. Nobody in their right mind would buy a condo there. It would be like living across the street from Richmond Summit.

corgimom
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corgimom 07/24/14 - 02:43 pm
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That's why an out-of-state

That's why an out-of-state business bought it, they don't know what they are in for.

Location, location, location.

hoptoad
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hoptoad 07/24/14 - 02:49 pm
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Good Idea, butterman, but in

Good Idea, butterman, but in that particular area the condos would have to be modestly priced.

That was such a grand place to go for a pleasant and pampered feeling. It was one of my favorite places to frequent.

Butterman
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Butterman 07/24/14 - 03:33 pm
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All good points
Unpublished

Hoptoad and Corgi... YOu both are right. I suspect the section 8 Bon Air residents are partly to blame for not that many people wanting to stay in the Partridge as a hotel. But the out of date and small rooms are also to blame. Despite the ambience and architecture.. the location has some big problems going for it.. the Bon Aire being just one of them. Lack of parking also comes to mind. The other option is some kind of upscale assisted living facility partnering with GRU Medical Center.

countyman
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countyman 07/24/14 - 03:47 pm
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Location, Location, Location

The article clearly says the hotel produced $3.9 million in total revenue last year.. All they need to do is update the hotel in order to compete against the new Sheraton, Hom2Suites by Hilton, etc..

Nobody spends millions of dollars without studying the demographics of the area first... The future owners are from out of town, because multiple people in Augusta don't have $5 million laying around.. The majority of large projects in Augusta are based on developers from out of town, because Atlanta is the only major city in Georgia..

The Patridge Inn is located right next to the Summerville neighborhood.. There's $1 million condos in Brooklyn right next to housing projects , and the Bon Air(mostly older people) is nowhere close to the experiencing the violent crime problems found in housing projects throughout Augusta. The building can easily be redeveloped or demolished..

Butterman
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Butterman 07/24/14 - 04:02 pm
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Location Location
Unpublished

Yes.. it is such a great location that it is being sold at a $5 million loss. How many times has this hotel changed owners in the last 15 years? If the location was so great doesn't seem like it would be hard to keep rooms rented. Hotels make money by booking rooms. Let's face it.. the location for a hotel in this area is off I20 around Washington Rd and Riverwatch... Hotels don't seem to have any trouble getting business there

Pops
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Pops 07/24/14 - 04:18 pm
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This has been an ongoing

conversation since the early 1970's......used to go to the bar on the lowest level of the hotel to hear live music.....(Hour Syn)......abandoned rooms above the bar.......talk of tearing it down......some foolish company would buy it in hopes of renovating it and turning a profit.....didn't happen then and looking like it ain't a gonna happen now......

countyman
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countyman 07/24/14 - 04:25 pm
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Facts

''. In July 2011, the entity defaulted on a $16 million loan and Walton Way Limited Partnership, the original lender and shell company for the group that owned Walton Way Hotel LLC, purchased the property in a foreclosure sale later that year.''

The hotel was purchased for $8.1 million before the recession hit.. Are you familiar with the real estate market? The article clearly explains why the hotel sold for the existing price..

The location is fine and they need to concentrate on updating the hotel.. The new Home2Suites by Hilton and the Residence Inn by Marriott underway is located in the Augusta Exchange area.. The DoubleTree is also located in the same area... The new Holiday Inn Express and the most expensive chain hotel(Marriott) in the CSRA are located downtown. The new Hampton Inn and the renovation of Red Roof Inn on Gordon Hwy is in South Augusta

Multiple hotels are thriving in the county and they're not off I-20/Washington/Riverwatch..

Butterman
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Butterman 07/24/14 - 04:30 pm
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FACTS
Unpublished

This hotel was built at a time when Augusta was a winter destination for Yankee tourists... Nearly 100 years ago. Now that place is called Florida. You know that whole "air conditioner thing". You simply do not have the snow birds coming to Augusta anymore like you did in the early decades of The 20th century to keep these grand old hotels in busness. That is precisely why the even grander Bon Aire Hotel across the street closed and later got turned into the section 8 apartments that they are today. Aside from the one week of The Masters, Augusta is simply not a tourist destination. The people who do come here the 51 other weeks out of the year are usually doing so for some kind of business (especially now with the Cyber command at Fort Gordon), usually contractors on a short term project at The Fort or SRS etc.. They basically want a clean, efficient room close to the major highway corridors like I20 and I520. For those people, this is not a good location.

Pops
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Pops 07/24/14 - 04:45 pm
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"The location is fine and they need to concentrate on

updating the hotel."

Listen up......IT'S BEEN AT THE SAME LOCATION FOR ALMOST A CENTURY. IT'S BEEN RENOVATED AND UPDATED TWICE IN MY LIFETIME......IT AIN'T GONNA MAKE IT.......

Always with the "they ought to"......

corgimom
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corgimom 07/24/14 - 06:49 pm
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Countyman, a hotel can

Countyman, a hotel can produce $3.9 million in revenue.

But if their expenses are more than that, like 4 or 5 million, they go broke. Hotels aren't cheap to run, and especially old ones like that one. The utilities must be enormous, not to mention the debt service.

And nobody ever has $5 million laying around, they get loans and venture capital and sell stock. Your idea that nobody from Augusta has that kind of money is not true. There is some BIG money in the CSRA, they just don't flaunt it, because that's tacky. But Augustans know better than to sink money in that thing.

Nobody has made a go of it in 15 years, it's like a revolving door there. In fact, it's been longer than that, I stayed there one horrible night in 1988. It was literally a Roach Hotel.

When the Morris Marriott came in, it pretty much wiped out the PI. It's a nobrainer. Why would anybody want to stay in the PI when they could stay at the Marriott and have a much better experience?

Before that, if somebody wanted to stay near MCG, they had the horrible drug and prostitution den of that dreadful hotel on 15th St, or the PI. And the PI gave a huge discount to MCG guests. Now, there are options.

144 rooms, 365 days, $3.9 million in revenue. That means that each room only generated $75 per day, and there's no way that can make a profit. They only grossed an average of $375,000 per month, that's horrible. And that includes an on-site restaurant, and a bar with a liquor license, and it still had those kind of figures.

Nobody sells profitable businesses, Countyman, and nobody defaults on mortgages that have prosperous businesses on them. If they were prosperous, they wouldn't have gone into foreclosure.

The truth is that now there's too much competition in too small of an area, and people can stay in a much better atmosphere than that of being across from the Bon Aire. Ugh. And if a hotel is going to charge premium rates, it had better deliver, and the PI can't.

They used to have great brunches, it's too bad.

harley_52
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harley_52 07/24/14 - 06:54 pm
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"Nobody spends millions of dollars....

....without studying the demographics of the area first"

Aw...what do they know? I'm sure they've got so much money they make a purchase like this without any thought, or exploration. Why, they probably never even considered any kind of cash flow analysis, or any thoughts about ROI.

Now....IF they had been REALLY smart, they would have sought the advice of some of these anti-Augusta ARC-haters and made a far better decision.

gargoyle
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gargoyle 07/24/14 - 07:21 pm
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Valued at 12m bought for

Valued at 12m bought for 8m,Defaulted on at 16m and sold at 4 1/4 m sounds like the market has reappraised the value the location.

corgimom
34196
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corgimom 07/24/14 - 08:28 pm
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I think at $4.25 MM it's

I think at $4.25 MM it's still highly overpriced.

corgimom
34196
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corgimom 07/24/14 - 08:30 pm
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I wonder if they bought it as

I wonder if they bought it as a tax writeoff, or if they want the historical property tax credits.

Sometimes that's worth more than profits.

corgimom
34196
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corgimom 07/24/14 - 08:31 pm
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and "likely" doesn't mean

and "likely" doesn't mean "sure thing".

Gage Creed
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Gage Creed 07/24/14 - 09:22 pm
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Factss

If only the PI were to add greenspace, bike lanes and a jazz club... where all of RC's Pollyanna's could sit around and ROI themselves into an OI frenzy....

They may find that their EBITDAR don't qualify them as a CFO...

nocnoc
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nocnoc 07/25/14 - 07:04 am
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Any Bets

With the lack of Parking, location and such.
We are looking at future 2-3 bedroom Condo's ?
Just like was done to the George Walton building across the street on Hickman Rd in the mid 80's?

Or another BonAir Assisted living facility mess.

jimbob
105
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jimbob 07/25/14 - 07:55 am
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Just like a golf course, right price makes profit

Now that the big money has been invested in the PI in renovations by the previous owners, and the new lower price means much lower mortgage payments, the new owners can easily make a decent profit if they can continue the income stream. Consider the difference of the old mortgage debt service at $96,000.00 per month compared to the new debt service being $22,500 per month, huge profit potential.

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