Legendary Capital has sponsored the acquisition of the 142-room Fairfield Inn & Suites Denver Southwest Lakewood in a $19.4 million UPREIT transaction.
The deal utilized Legendary Capital’s “equity preservation UPREIT” structure in which the owners contributed the hotel in exchange for a special class of transition partnership units, allowing for the potential preservation of the contributor’s equity as the property re-stabilizes.
The company said that “the property is in the final stages of a conversion to a Fairfield Inn & Suites and is expected to become a consistent top performer in the market. This is Legendary Capital’s second transaction where they have stepped in to help ownership face the challenges of completing a new build or conversion.”
The property is located in the Denver-Aurora-Lakewood Metropolitan statistical area, which has a population of 2.8 million. The city of Lakewood is one of the largest suburbs of Denver with an estimated population of nearly 162,000. Lakewood is also home to more than 23 million square feet of commercial real estate, with numerous industries represented, including aerospace, information technology, manufacturing, government, mining and biomedicine.
“Suburban Denver checks all our boxes as a great place to invest, and we have a long history with Fairfield Inn & Suites and Marriott,” said Corey Maple, chief executive officer. “We are proud to include this deal in a series of successful [equity preservation UPREIT] transactions.”
The property is near the Redrock Park & Amphitheatre, and the conversion is expected to be completed in time for the 2022 concert season, the company noted.
“The Fairfield conversion is a great move in our eyes, and we believe it’s a great fit for this submarket,” said chief investment officer Dave Durell. “We’re essentially stepping into a brand-new property in a great location close to diverse demand generators.”
Legendary explained that the market experienced RevPAR stability pre-COVID and has since rebounded to the same levels seen in 2019. RevPAR, or revenue per available room, is a metric used in the hospitality industry to measure hotel performance. Due to the ongoing conversion, future renovation work is expected to consist of a minimal property improvement plan.
Through its affiliated entities, Legendary Capital has acquired more than 30 hotels in its portfolio, primarily targeting 80-to-200 room limited-service, select-service, full-service and extended-stay hotels in America’s heartland. The company is headquartered in Fargo, North Dakota.