Baltimore, MD – Alex. Brown Realty (ABR), a national real estate investment company, has entered into a joint venture with Landcom Hospitality Management (Landcom) to develop two adjoining hotels in downtown Jacksonville, Florida: a 123-room Hilton Garden Inn and a 98-room Hilton Homewood Suites. ABR Chesapeake Fund III, a value-added real estate investment fund sponsored by ABR, provided an equity commitment of $6.45 million to the venture. Landcom and its principals and partners provided an equity commitment of $3.0 million to the venture.Joseph Epstein of First American Realty Associates secured $20.5 million in debt financing on behalf of the joint venture.
Located between the St. John’s River business district and the upscale San Marco community and adjacent to the Jacksonville Skyway Kings Avenue station, the hotels will be part of a larger, transit-oriented development known as Kings Avenue Station.
“Downtown Jacksonville has experienced tremendous growth over the past five years due to strong support from the city and its Jacksonville 2010 planning initiative” commented Peter Bancroft, ABR’s senior vice president. “We anticipate that the growth will continue to increase the demand for lodging. With limited new hotel construction in the pipeline, we see this investment as a great opportunity to address the unmet demand and generate a strong return for our investors.”
The two adjoining hotels will be constructed as a single, eight-story building. The hotels will operate as separate entities with separate entrances but will share certain facilities, and back of the house operations, thereby reducing construction costs and creating operating efficiencies. “This design is among the first of a handful of dual-branded hotels to be introduced nationally that target multiple markets and are more cost efficient,” stated Hank Fonde, Landcom’s senior vice president and director of hotel development. “The project will fill a gap in the downtown market, which is currently underserved by major brands, and appeal to a broad mix of business, leisure, and extended-stay travelers.”
Hotel parking will be available in an existing 1,300-space municipal garage adjacent to the development site. Construction of the hotels has commencedand is expected to be completed by early 2009.
This is the third joint venture between ABR and Landcom. “We’ve enjoyed a successful 10-year relationship with Landcom and we are very pleased to be working together again,” stated John Prugh, ABR’s president and CEO. “Landcom has been in the Jacksonville market for 25 years; their talent and knowledge of the local market undoubtedly will add significant value to this project.”
Alex. Brown Realty (ABR) is a privately owned real estate investment manager organized in 1972 and headquartered in Baltimore, Maryland. ABR co-invests with joint venture partners in a broad spectrum of property types located throughout the United States. www.abrealty.com
Landcom Hospitality Management (Landcom) was formed in 1982 by the O’Steen family of Jacksonville. During the last 25 years, the company has owned or operated 60 hotels in 12 states. Landcom limits its growth by selectively developing relationships with respected financial entities and investors. Landcom’s size enables it to be responsive and flexible to the needs of its hotels, guests and clients. www.lhmhotels.com