Top hotels projects and sales in 2019: Upper-midscale hotels hot.

Byline: Matt M. Johnson

In terms of blockbuster sales, 2019 was a slow year in the Twin Cities. But investors still came to the metro area to buy as hotel developers continued to build.

The local market has not yet peaked in terms of total hotel rooms built as nearly 1,500 new rooms were added to an inventory of about 45,400, according to Tennessee-based STR, which tracks the hotel market. Those rooms continued to fill, with average nightly occupancy hitting 68.2% through the end of November.

Evolving tastes of overnight guests and an appetite for something new and different was likely behind the success of a number of newer Twin Cities hotel concepts, said Steve Sherf, president of the Excelsior-based Hospitality Consulting Group.

"As development trends start to level off, hotel companies come out with new franchises," he said in a recent interview. "To this point, it's been working."

Several boutique hotels opened this year in the Twin Cities, while others are still in development, including a $45 million, 156-room Element hotel United Properties plans to open next to Target Field early this year.

The sales and investment side of the 2019 market had investors stocking up on upper-midscale brands from Marriott, Hilton and IHG, said Jon Ruzicka, a regional manager with the Twin Cities office of Marcus & Millichap. At the same time, the market saw no sales of "upper-upscale" hotels during the year. He expects more of the same in 2020.

"As long as we don't have some sort of big disruptor, that's a trend we see continuing," he said in an interview.

Marcus & Millichap's Twin Cities office sold eight hotels in 2019 for a total of about $30 million.

The Twin Cities saw generally smaller hotel deals, with only a few selling for between $10 million and $30 million. The following list of hotel market moves includes the top five Twin Cities sales this year and five recent hotel completions.

Top hotel sales of 2019

Hampton Inn & Suites Downtown St. Paul

Address:200 Seventh St. W., St. Paul

Purchase price: $31.7

Rooms:160

Price per room:$198,000

Date of sale:March 4, 2019

Buyer:Apple Hospitality REIT, Richmond, Virginia

Seller:Vista Host

Description:Developed alongside the 191-unit Oxbo apartments on the former Seven Corners site, the Hampton Inn has quickly gained a share of the city's corporate, leisure and health care hotel guests, according to Apple REIT Chief Investment Officer Nelson Knight. Seller Vista Host developed the property for about $30...

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