Baltimore, MD – Alex. Brown Realty (ABR), in conjunction with PEG Development (PEG) and Blue Diamond Capital (BDC), announce plans to develop two hotels, a structured parking garage and mixed use retail on a 3.26 acre development site in downtown Salt Lake City, Utah. ABR Chesapeake Fund IV, a value-added real estate fund sponsored by ABR, invested $7.5 million in the venture.
The site is at the southwest corner of West 100 South & South 300 West, adjacent to the Energy Solutions Arena. The 19,911 seat arena is home to the Utah Jazz professional basketball team and hosts numerous events throughout the year. In addition, the site is located one block west of the 679,000 sf Salt Palace Convention Center and three blocks west of Temple Square, Salt Lake City’s biggest tourist attraction. City Creek and Gateway, two of the most prominent Salt Lake City retail centers providing approximately 1.5 million square feet of retail shopping and dining, are located within walking distance of the site.
The project will be built in two phases. Phase I will consist of a 159-room extended-stay Hyatt House hotel and a 349-space structured parking garage. This will be the first urban Hyatt House in the Hyatt portfolio. The ownership group secured a $19.4 million construction loan from U.S. Bank for Phase I. Prior to commencing construction, the joint venture will complete an environmental remediation of the site in accordance with plans approved by the Utah Department of Environmental Quality and the U.S Environmental Protection Agency. Phase II will consist of a 175-room select-service new urban Courtyard by Marriott hotel. Both hotels will feature ground-level retail and the parking garage will accommodate hotel guests as well as event parking for the Arena and convention center. The joint venture anticipates a fall 2014 opening for the Hyatt House Hotel and a spring 2015 opening for the Courtyard by Marriott.
Rimrock Construction of Draper, Utah is the General Contractor for the joint venture with Beecher Walker Architects of Holladay, Utah as the project architect. Lodging Dynamics of Provo, Utah, will manage both the Hyatt House and Courtyard by Marriott.
PEG Development and Blue Diamond Capital acquired the site in September of 2011 and have since received all necessary approvals to begin construction. “We are thrilled with the location of this project – with its ease of access to the City’s improved public transportation, and other Salt Lake entertainment, business function and retail amenities,” said Cameron Gunter, PEG’s founder and managing member. “We have a very strong ownership group and the City has been very helpful over the past couple years in making this project come together.”
Based on data provided by PKF Consultants, supply in the Salt Lake metro area increased by 2.3%, while demand increased by 6.3% since 2009. “We see a real opportunity in the market for new hotel rooms,” stated Gunter.
“This project represents an attractive opportunity to develop and subsequently own two high-quality hospitality assets in an excellent infill location,” said Tom Burton, ABR’s chief investment officer. “We have a strong development partner in PEG Development and an outstanding hotel operator in Lodging Dynamics and we look forward to leveraging their expertise to achieve a strong return on our investment.”
“We are pleased to support the downtown district’s prosperity and growth,” said John Seastrand, head of U.S. Bank Commercial Real Estate’s Salt Lake City office. “The hotels have a premier location in Salt Lake City and support the region’s reputation as a destination for travelers.”
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
PEG Development (PEG) is a Provo, Utah-based commercial real estate investment and development company founded in 2003. PEG focuses on hospitality, multi-family, and commercial properties located in the Intermountain West region of the United States. The team at PEG offers considerable experience in project design and engineering, financing, city entitlements, tax incentives, construction management, marketing and property management. www.pegdevelopment.com
Blue Diamond Capital (BDC) is a family-office headquartered in Orem, Utah organized in 2007. Blue Diamond’s investment interests are diverse and include hospitality, multi-family, commercial, residential land, and private-equity investments primarily focused in the Intermountain West region of the United States.
Lodging Dynamics Hospitality Group (LDHG) is based in Provo, Utah, and is an award-winning operator of extended stay and select service premium branded hotels in the Western United States. Lodging Dynamics’ expertise is in maintaining brand standards, cost control, marketing, revenue management, and reporting services for hotel owners and investors. www.lodgingdynamics.com
U.S. Bank has 38 branches and employs more than 350 people in the market – up 43 percent since 2008. U.S. Bancorp (NYSE: USB), with $355 billion in assets as of March 31, 2013, is the parent company of U.S. Bank, the 5th largest commercial bank in the United States. Celebrating its 150th anniversary this year, the Company operates 3,080 banking offices in 25 states and 5,056 ATMs and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. Visit U.S. Bancorp on the web at usbank.com.