2 Metro Hotel Properties Hit The Auction Block
Two metro-area hotels are up for auction this week: the 60-room Riverwood Inn & Conference Center in Otsego and an 80-room AmericInn Hotel & Suites in Inver Grove Heights.
The distressed properties may offer a chance for buyers to acquire the properties at a discount compared to what it would cost to build new hotels.
The Riverwood Inn’s online auction is set for Thursday between noon and 2 p.m. The opening bid for the property is $250,000, but it has a higher, undisclosed “reserve” price—the minimum that the seller will accept. Los Angeles-based CBRE Group, Inc., the world’s largest commercial real estate services firm, is handling the auction.
Douglas Johnson, managing director with CBRE Auction Services, said the property, which offers banquet rooms and views along the Mississippi River, is well known in the Otsego area.
“It’s a very nice property,” he said. “It’s really a well-located property. The conference and banquet rooms have always done real well.”
Otsego is located about 35 miles northwest of downtown Minneapolis. The Riverwood Inn is located at 10990 95th Street Northeast in Otsego, and the lender-owned Riverwood Inn is owned by Prinsburg-based CapFinancial Properties.
The AmericInn Hotel at 5861 Blaine Avenue in Inver Grove Heights has also been put on the auction block through the Auction.com website. The starting bid for the property is $700,000; on Tuesday morning, the “current bid” was listed as $1.45 million, although the reserve price had not yet been met.
The auction for the Inver Grove Heights hotel began on Monday and concludes on Wednesday. According to property records, the AmericInn Hotel is owned by an affiliate of Irving, Texas-based C-III Asset Management, a special servicer that works with troubled commercial property mortgages.
Lee Kerfoot, a hotel real estate advisor with Eden Prairie-based Timm & Associates Inc., said that both properties should draw interest because there are not many hotels currently up for sale in the Twin Cities.
“It’s lean,” Kerfoot told Twin Cities Business. “There’s a strong demand for hotels in the metro area.”
Veteran investment sales broker Mark Kolsrud, senior vice president with the local office of Colliers International, said that that auctions could attract so-called “value add” investors—buyers who are drawn to properties that need some work.
“Value add investment groups are having a harder time than ever finding places to place capital. So they’re focusing more and more on some of these auctions,” Kolsrud said.