The New Orleans hotel and lodging market continues to draw the attention of outside investors, as another downtown hotel property has changed hands.
The recently rebranded Hotel 504 at 1300 Canal St., a 157-room hotel formerly flagged as a Clarion Inn & Suites, sold to a South Florida group for $20.4 million, according to Civil District Court conveyance records in Orleans Parish. The deal closed Nov. 18.
The buyer is a corporate entity linked to InSite Group, a boutique real estate investment and development company based in Fort Lauderdale, Florida. The sale represents the company’s first purchase in New Orleans.
According to a news release from InSite Group, the New Orleans property was part of a simultaneous transaction last month that included two other hotels in Tampa and Orlando. InSite Group president and CEO Ben Shmul said in a statement that the company is planning renovations and upgrades at each hotel that will begin sometime next year.
The seller is listed as Kahn Properties, Inc. of Metairie. Records from the Secretary of State’s office list Metairie residents A. Raoof and Carmen R. Khan as officers in the LLC. They could not be reached for comment.
The Hotel 504 sale is the most recent in a string of transactions over a roughly two-year span that has involved both buying and building lodging properties downtown. Many of the transactions have involved institutional investors from outside the area.
“The city has become a very attractive market, particularly for new brands and new companies that had not been in the area before,” said Adam Lair, senior vice president and partner at HVS Global Hospitality Services, an industry consulting firm. “As long as we continue to see strong performance growth, we will continue to see deals like this.”
Lair said the city’s stock of hotels continues to see tremendous growth in revenue per available room, or RevPAR, a valued performance metric in the hotel industry. He said that growth, coupled with a dwindling number of suitable suites for new development, is making existing properties more lucrative.
“You are starting to see prices grow both locally and nationally right now,” Lair said. “Considering the way the market has gone in New Orleans, I think you are going to start to see things emerge more in the Uptown and Warehouse District areas with the proposed expansion of the convention center.”
Lair said the Hotel 504 sale was likely bolstered by the recent opening of the new University Medical Center just down the street.
The hotel dropped its Clarion flag and rebranded as an independent property earlier this year after undergoing a renovation. According to the city permitting office, a permit was issued in November to allow for a signage change. The property has also operated as an AmeriHost Inn.
Orleans Parish Assessor’s Office records show that Khan Properties has owned the building since 1997, when it was purchased from the administrators of the Tulane Educational Fund for $1.1 million. The 15-story building had been previously used as a residence hall for the nearby Tulane medical school.