Downtown Cleveland hotel sells to NY-based REIT

Downtown Cleveland's Hilton Garden Inn
Downtown Cleveland’s Hilton Garden Inn and Gateway
Conference Center as seen from Interstate 90 (Google).
CLICK IMAGES TO ENLARGE THEM

Downtown Cleveland’s Hilton Garden Inn, 1100 Carnegie Ave., sold on Dec. 9 to a New York City-based real estate investment trust that specializes in owning Marriott- and Hilton-branded hotels.

The 11-story, 240-room hotel, its adjoining Gateway Conference Center and the 2.85 acres on which the complex sets was sold for $28.16 million to MCR Cleveland LLC, according to Cuyahoga County records.

MCR Cleveland is an affiliate of MCR Hospitality Fund REIT LLC, headquartered on the 86th floor of One World Trade Center in New York City. It also has a secondary headquarters in Dallas.

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The REIT, formed in 2006, owns about 90 hotels totaling 15,000 rooms with a combined value of $3 billion, according to MCR’s Web site. Their hotel properties are in 30 states and 76 cities. This is MCR’s first acquisition in the Greater Cleveland market but is its sixth hotel located in Ohio.

MCR owns the Homewood Suites by Hilton in Columbus/Ohio State University, Hilton Garden Inn in Dublin (Greater Columbus), Courtyard by Marriott in Lima, Homewood Suites by Hilton in Milford (Greater Cincinnati) and the Hampton Inn & Suites in Perrysburg (Greater Toledo).

The Gateway Conference Center
The Gateway Conference Center, at right, was included in the
Dec. 9 sale of the downtown Hilton Garden Inn (Google).

The firm does not own any hotels in Greater Pittsburgh, Greater Buffalo or in the entire state of Michigan, its Web site shows. MCR touts that it is a recipient of the Marriott Partnership Circle Award, the highest honor Marriott presents to its owner and franchise partners, and the 2018 Hilton Legacy Award for Top Performer.

On the same day the hotel property purchase was recorded by Cuyahoga County, a $22,730,000 mortgage from Wells Fargo Bank to MCR also was recorded by the county along with a subordination agreement by MCR Cleveland Tenant LLC of Dallas for Wells Fargo Bank.

Based on recent transactions, the property has gained significantly in value in recent years. In 2012, the hotel’s first owner, 1100 Carnegie, LP, sold it to JPMCC 2006-LDP7 Carnegie Avenue, LLC. for $12.43 million.

Then, it was sold again in 2015 to Hotel 1100 Carnegie, L.P. for $16,597,500, according to Cuyahoga County records. Hotel 1100 Carnegie sold the Hilton Garden Inn to MCR. This latest sale of $28.16 million represents a 133 percent increase in market value for the hotel in just seven years.

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The proximity of Progressive Field
The proximity of Progressive Field, seen in the background,
is a major selling point for the Hilton Garden Inn (Google).

The 11-story Hilton Garden Inn was built in 2000 and measures 138,116 square feet. In addition to guestrooms, suites and accessible rooms, it has a fitness center, pool and whirlpool. Also on site is Harvey’s Bar and the Great American Grill restaurant which provides table and room services.

The neighboring 32,095-square-foot Gateway Conference Center was built in 1900 and renovated in 2001, county records show. Meeting space in the building measures 20,000 square feet not including audiovisual facilities, full-service catering and preparation rooms and other support areas.

Downtown Cleveland’s Hilton Garden Inn is less than a block away from Interstate 90 and Progressive Field, home of the Cleveland Indians baseball team. It is one of four Hilton Garden Inn locations in the metro area, including Hopkins Airport, Mayfield Village and Twinsburg locations.

Sales of local Hilton Garden Inns show stability with the chain here. Other than downtown, the most recent sale was the Mayfield location which transferred in 2018 via a receivers deed for $2.3 million. The Twinsburg hotel last transferred in 2008 for $16.5 million while the Cleveland Airport site last transferred in 2000 when that hotel was built, county records show.

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