SAVANNAH - Open for less than two years, the historic downtown Marshall House hotel is up for sale after being plagued with low occupancy rates.
Jones Lang LaSalle Hotels, a leading hotel investment banking services group in Los Angeles, is handling the arrangements of the sale. The Marshall House is up for sale along with five hotels in Monterey and Laguna Beach, Calif.
Sources involved in the sale say the hotel at 123 E. Broughton St. has been performing below expectations since it opened in August 1999. Its occupancy rate is an estimated 20 percentage points below the average of all other hotels in the downtown historic Savannah area, industry analysts say. On average, downtown hotels in Savannah rent 70 percent of their rooms.
No layoffs or major changes in hotel operations are expected.
The Marshall House is owned by Coastal Hotel Group and PaineWebber. PaineWebber is the majority owner; Coastal Hotel is the management company and a minority owner. PaineWebber, a full-service securities firm, owns the five California hotels outright.
Art Buser, executive vice president and head of West Coast operations for Jones Lang LaSalle Hotels, said the owners decided last week to add the Marshall House to the for-sale package. He said the company will go to its database of industry movers and shakers to seek prospective new owners.
A profile of possible buyers are:
A regional hotel owner or operator.
A national or international boutique operator. A boutique hotel is an upscale, luxury hotel with 100 rooms or fewer.
A real estate investment fund. Such funds are attracted to markets and properties with both good return on investment and opportunity for improvement.
An independently wealthy individual, most likely someone who is either from Savannah or has good will for the city.
So far, discussion of a sale price is premature, Mr. Buser said. But it's expected that the hotel will sell for more than $11 million because that much was invested for renovations in 1998. The total hotel package could fetch between $90 million and $100 million.
Jones Lang LaSalle will send out investment highlights to about 250 people to see who might be interested. Those who nibble on the bait will get a tour of the hotel. Mr. Buser expects a request for offers should take place in March and the facility should be sold within six months.
The California investment firm and PaineWebber prefer to sell the Marshall House as part of a package but will entertain offers to sell the properties individually, Mr. Buser said.
Coastal Hotel Group, a management company out of Chicago, has a long-term management contract to run the hotel, said Marshall House General Manager Kurt Ratzlaff. Mr. Ratzlaff said the staff of more than 50 has been informed of the pending sale, and workers will not lose their jobs.
"At this point, nothing will affect the employees and staff at the hotel," he said. "Employees know and there is no concern amongst the staff on what's going to happen to them."
The Marshall House had been closed for more than 40 years before renovations began in 1998. It opened a year later. Refurbishing took place for more than a year to make the deteriorating hotel new again without losing its genteel charm.
Rates at the 68-room hotel range from $139 to $350 per night.
Anthony Schopp, president and CEO of the Savannah Area Convention and Visitors Bureau, said the sale comes as no surprise. It's common for hotel owners to sell a property once its value rises. Just as some homeowners sell their properties once they appreciate in value, so do hotel owners. He doesn't expect the sale to affect the way the hotel is run.
"I expect absolutely zero change," Mr. Schopp said. "When the Hyatt sold, there was no change in operation. It was a transparent, invisible change. It doesn't relate to the management of the hotel."
© 2016. All Rights Reserved. | Contact Us