On May 30th 2014, Haberhill with its partner Walton Street Capital, LLC, purchased what was then the 917 room Renaissance St. Louis Grand, for a net cost of $19.5 million or approximately $21, 300/ key.
Pursuant to a revised management agreement with Marriott International (“MI”), upon completion of a property improvement plan (“PIP”), MI agreed to convert the hotel to a full service Marriott. The required PIP included the following:
- Guest Rooms Upgrades – All guest rooms received new carpet, wall coverings, window treatments, bedding, and televisions as well as new case goods.
- Guest Bathroom Refresh – New vanities with additional towel storage and/or counter space, new showerheads, curved shower rods, new shower curtains and new toilets.
- A complete renovation of the lobby, creating a new front desk, a new bar, restaurant, and marketplace.
- Meeting Rooms Improvements –
- Existing Meeting Space Renovations – The Landmark Ballroom received new carpet and wall covering. Air walls in the ballrooms and smaller meeting rooms were repaired and received new wall coverings. Mezzanine meeting rooms received limited renovations (dispose of current window treatments, minor repairs and new pre-function carpet). The meeting rooms’ renovation plan also included repairing/repainting trim and doors throughout the meeting space as well as new banquet chairs and tables.
- New Meeting Rooms – Moving the restaurant to the lobby level created an opportunity to add new breakout space in the lower level. The additional space totals approximately 4,150 sf of breakout space in four rooms, plus over 3,000 sf of pre-function space. The larger two rooms were combined into a larger 2,945 sf room. Overall, the plan created high quality breakout space to support the larger ballrooms in the Ballroom Building as well as an ideal space for smaller, self-contained meetings.
- The renovation was completed in just over a year and the hotel was converted to a Marriott in August of 2015
- Total cost of the renovation was approximately $29 million. Total investment in the hotel was under $60,000 per key or approximately 20% of replacement cost. After the hotel experienced little or no cash flow for 3-4 years prior to the acquisition. 2016 results yielded an approximate 12% unlevered cash on cash return. 2017 is expected to yield approximately 15%.
- In January 2017 we refinanced the original 33.8 million of debt with a new $57 loan, returning over 115% of the original investment.