Denver Mayor Mike Johnston, left, and District 9 City Councilman Darrell Watson, second from left, speak with homeless activist Caryn Sodaro, right, as they visit an encampment on Stout Street near 22nd St on Aug. 3, 2023. (Kathryn Scott/Special to The Denver Post)
Denver’s deals for hotels to house the homeless keep coming.
A lease deal for a 300-room former Doubletree in the city’s northeast went into effect just before Thanksgiving, when a local nonprofit closed on its purchase of the structure. The city may end up buying the property from the nonprofit.
And the City Council will soon take up consideration of another proposed lease, for a 200-room Embassy Suites by Hilton in the city’s southeast quadrant. That hotel is also slated to be bought by local nonprofits.
They are the city’s third and fourth hotel deals since August. That month, the city bought a 96-room former Stay Inn and the Denver Housing Authority bought a 194-unit former Best Western to lease to the city for homeless services.
Mayor Mike Johnston, who took office in July, has made housing the homeless and reducing the number of illegal encampments along city streets his signature issue.
The Doubletree hotel property at 4040 N. Quebec St. in Denver. (Google Street View)
Former Doubletree: 4040 N. Quebec St.
Denver-based Rocky Mountain Communities, which owns and operates income-restricted housing in the region, closed on its purchase of the former Doubletree by Hilton at 4040 N. Quebec St. on Nov. 22, according to public records.
The city’s lease of the property in Central Park went into effect upon closing, according to Mark Marshall, the organization’s CEO.
The nonprofit is leasing the 300-room hotel to the city for $83,333 a month for a year, with a possible extension for three additional months. That works out to $1.25 million over the 15 months, or $9 per room per day.
The Denver City Council approved the lease deal on Nov. 6. Last Monday, the council approved a separate $10 million contract with The Salvation Army for that organization to manage the facility through the end of next year.
The lease deal also gives the city the option to purchase the hotel for the same $39 million, although city documents noted that holding and carrying costs could bring the full price paid up to $43 million. All rent paid will be credited toward the purchase price.
Lisa Lumley, the city’s director of real estate, told council members in October that the deal was structured that way because the city expects to receive a state grant that it will use for the purchase, but “we need to hold off on any real commitments until we receive our documents from the state.”
The $39 million price tag is 60 percent more than what the seller of the hotel, an affiliate of Boston-based Pyramid Global Hospitality, paid for it. Pyramid bought the hotel for $24.4 million in February 2022, records show.
Marshall noted that deal occurred while the pandemic was still a lingering issue, and said it was a portfolio sale, when assets typically sell for less than they might have fetched if sold individually. He characterized the deal as “kind of a fire sale.”
“It was during COVID and the appraisal was based on a hotel that was not fully occupied,” Marshall said.
The Colorado Housing and Finance Authority, or CHFA, and the Urban Land Conservancy provided financing for the acquisition.
“This is an opportunity for us to play a role in being part of the solution,” Marshall said.
The Embassy Suites hotel at 7525 E. Hampden Ave. in Denver. (Google Street View)
Embassy Suites: 7525 E. Hampden
In southeast Denver, the city plans to lease what is currently an Embassy Suites from Archway Investment Corp. and the Urban Land Conservancy, according to city documents.
The nonprofits are set to purchase the property from an affiliate of New York-based AWH Partners, which paid $23.91 million for it in December 2018, records show.
Urban Land Conservancy spokeswoman Andrea Burns said the organization is still in the due diligence phase, so the purchase price and closing date haven’t been finalized.
Once the sale closes, the city would then pay $17.79 million to lease the 149,000-square-foot hotel for five years, counting three one-year extension options, according to city documents. That works out to $50 per room per day.
The facility will primarily serve families with children, according to the city. The deal was originally slated to go before a City Council committee this Tuesday, but that has been pushed back.
Denver Mayor Mike Johnston, left, and District 9 City Councilman Darrell Watson, second from left, speak with homeless activist Caryn Sodaro, right, as they visit an encampment on Stout Street near 22nd St on Aug. 3, 2023. (Kathryn Scott/Special to The Denver Post)
Denver’s deals for hotels to house the homeless keep coming.
A lease deal for a 300-room former Doubletree in the city’s northeast went into effect just before Thanksgiving, when a local nonprofit closed on its purchase of the structure. The city may end up buying the property from the nonprofit.
And the City Council will soon take up consideration of another proposed lease, for a 200-room Embassy Suites by Hilton in the city’s southeast quadrant. That hotel is also slated to be bought by local nonprofits.
They are the city’s third and fourth hotel deals since August. That month, the city bought a 96-room former Stay Inn and the Denver Housing Authority bought a 194-unit former Best Western to lease to the city for homeless services.
Mayor Mike Johnston, who took office in July, has made housing the homeless and reducing the number of illegal encampments along city streets his signature issue.
The Doubletree hotel property at 4040 N. Quebec St. in Denver. (Google Street View)
Former Doubletree: 4040 N. Quebec St.
Denver-based Rocky Mountain Communities, which owns and operates income-restricted housing in the region, closed on its purchase of the former Doubletree by Hilton at 4040 N. Quebec St. on Nov. 22, according to public records.
The city’s lease of the property in Central Park went into effect upon closing, according to Mark Marshall, the organization’s CEO.
The nonprofit is leasing the 300-room hotel to the city for $83,333 a month for a year, with a possible extension for three additional months. That works out to $1.25 million over the 15 months, or $9 per room per day.
The Denver City Council approved the lease deal on Nov. 6. Last Monday, the council approved a separate $10 million contract with The Salvation Army for that organization to manage the facility through the end of next year.
The lease deal also gives the city the option to purchase the hotel for the same $39 million, although city documents noted that holding and carrying costs could bring the full price paid up to $43 million. All rent paid will be credited toward the purchase price.
Lisa Lumley, the city’s director of real estate, told council members in October that the deal was structured that way because the city expects to receive a state grant that it will use for the purchase, but “we need to hold off on any real commitments until we receive our documents from the state.”
The $39 million price tag is 60 percent more than what the seller of the hotel, an affiliate of Boston-based Pyramid Global Hospitality, paid for it. Pyramid bought the hotel for $24.4 million in February 2022, records show.
Marshall noted that deal occurred while the pandemic was still a lingering issue, and said it was a portfolio sale, when assets typically sell for less than they might have fetched if sold individually. He characterized the deal as “kind of a fire sale.”
“It was during COVID and the appraisal was based on a hotel that was not fully occupied,” Marshall said.
The Colorado Housing and Finance Authority, or CHFA, and the Urban Land Conservancy provided financing for the acquisition.
“This is an opportunity for us to play a role in being part of the solution,” Marshall said.
The Embassy Suites hotel at 7525 E. Hampden Ave. in Denver. (Google Street View)
Embassy Suites: 7525 E. Hampden
In southeast Denver, the city plans to lease what is currently an Embassy Suites from Archway Investment Corp. and the Urban Land Conservancy, according to city documents.
The nonprofits are set to purchase the property from an affiliate of New York-based AWH Partners, which paid $23.91 million for it in December 2018, records show.
Urban Land Conservancy spokeswoman Andrea Burns said the organization is still in the due diligence phase, so the purchase price and closing date haven’t been finalized.
Once the sale closes, the city would then pay $17.79 million to lease the 149,000-square-foot hotel for five years, counting three one-year extension options, according to city documents. That works out to $50 per room per day.
The facility will primarily serve families with children, according to the city. The deal was originally slated to go before a City Council committee this Tuesday, but that has been pushed back.
