ACQUISITION, RECONVERSION & MANAGEMENT
The Artmore Hotel is a distinctive boutique hotel located on West Peachtree Street, right in the heart of Atlanta's vibrant Cultural Arts District. This independent hotel takes pride in offering a personalized guest experience that sets it apart from other accommodations in Midtown Atlanta. The renovation project encompassed the restoration of the building's façade, preserving its Spanish Mediterranean aesthetic from its original construction in 1924. Guests can indulge in the inviting ambiance of the Studio Bar & Lounge, an ideal spot for enjoying a pre or post-night-out cocktail.
102-key suite hotel consisting of standard guest rooms, suites and 2-story lofts
Located in the heart of Midtown Atlanta’s Arts District
Distinctive architecture, including Spanish columns and archways
Rooms feature LCD TV’s, iPod docking stations
Indoor facilities include meeting and banquet rooms, an ultra-modern lounge, a business center, and a fitness center
Grounds include a cocktail garden, courtyard, and outdoor fire pit
With a Class “A” location at the corner of 16th Street and West Peachtree Street in the Arts District of Midtown Atlanta, The Best Western Granada Suites Hotel was well-suited for repositioning from a “blue collar” limited- service hotel to a boutique hotel. Although ideally located, the property did not meet the quality standards necessary to capture the hotel clientele generated by legal, financial, and banking institutions within its trade area. Acquired in an off-market transaction directly from the owner, Urbana completed a $3.5 million renovation of the property and rebranded the hotel as The Artmore Hotel. At the time of the acquisition, the hotel was ranked 92nd out of 201 hotels in Atlanta by TripAdvisor. Today the Artmore Hotel is ranked 12th. The property was purchased by UVOF II in 2015 for $15m and sold in August 2022 for $20.85m.
This aging asset, built circa 1923 and converted to a hotel in the 1970s, required extensive renovation in order to capture a higher-end clientele. Benefiting from an all-suite layout, Urbana recognized that conversion to a boutique hotel could be accomplished without disturbing the integrity of the structure and associated displacement costs. Best Western generally attracted lower-end blue collar hotel clientele, although its superior location was home to high-end financial, legal and Fortune 500 businesses within a vibrant, high-density Class “A” office market experiencing an occupancy rate of approximately 90% at the time of acquisition. Urbana was able to identify a void in the boutique hotel Midtown market that offers an ADR in the $125 - $165 range through an in-house study of the area’s lodging market dynamics. Repositioning and renovation efforts of the Best Western Granada Suites Hotel targeted an overall renovation cost of $3.5 million or approximately $35,000 per key to enhance the property’s performance and up-brand the asset while maintaining “the best value” in Midtown. Urbana converted non-revenue-generating space within the property to revenue-generating space by changing the dynamics of facilities, linking dormant areas with vibrant, amenity-rich environments within the hotel. The local operator was not utilizing modern revenue management or marketing techniques and thus not maximizing the full revenue potential of the asset. Urbana aggressively and directly markets to all demand generators in an “order maker” versus “order taker” approach (unlike many management companies that largely rely on a reservation system to fill rooms).
Urbana’s plan of action was implemented over the course of the hold period of The Artmore Hotel and consisted of several different strategies to improve the bottom line. A great turnaround begins in a great property improvement plan and the physical improvements of The Artmore included improving the front entrance/landscaping of the hotel, renovating the courtyard, completely renovating the lobby and expansion of the bar area, as well as re-painting and re-carpeting the lobby and hallways. Other common area maintenance included upgrading the elevators, complete refurbishment of conference room areas, and the installation of a fire sprinkler system. Rooms were also upgraded from the flooring and paint down to the beds and linens. Air conditioners were added to the rooms, new windows, and suites received new furnishings. To improve street presence, front signage was improved for foot traffic in the bustling Mid Town area of Atlanta. Operational improvements are what we at Urbana pride ourselves on. Improvements included reviewing of staffing levels. Eloquently, Urbana stands by the mantra “Eliminate where necessary, enhance where possible”. Cross training of staff was implemented to improve the overall chain of command. The marketing department was computerized, and a property management system was set in place. Urbana also acquired a liquor license and added an evening food service for the hotel resulting in over $100,000 in additional revenue. The re-branding of a hotel is difficult in any scenario but Urbana’s ability to distance itself from Best Western brand affiliation and converting the property to an independent asset is another striving point. In total, upon acquisition, The Artmore was an ageing asset, underperforming vis-à-vis its competitive set, functioning below its highest and best use, lacking appeal to the institutional investor. Today, the Artmore Hotel is a successfully renovated boutique hotel, performing at the top of its competitive set, ranked the 11th best hotel in Atlanta, and well-suited to delivering handsome returns to institutional investors.
Upon acquisition, The Artmore was an ageing asset, underperforming vis-à-vis its competitive set, functioning below its highest and best use, lacking appeal to the institutional investor. Today, the Artmore Hotel is a successfully renovated boutique hotel, performing at the top of its competitive set, ranked the 11th best hotel in Atlanta, and well-suited to having delivered handsome returns to institutional investors.
Urbana sold the Artmore in August 2022 for $20,850,000 or $204,412 per key yielding an Internal Rate of Return of 19% and a Capital Return Multiple of 1.91x.