Breaking Down Moody's Purchase

Scott Griemsmann's Paramount Lodging Advisors just repped a Central Valley farming family in their sale of TownePlace Suites by Marriott to Moody's REIT for $11.4M. The three-story, 127-room Newark hotel opened in 2000 and caters to extended stay travelers in East Bay and Silicon Valley. Moody had right of first purchase via their Tenant In Common connection, a model they went after in the last cycle. The loan to value was the biggest challenge with the property at first, but cash flows in that part of East Bay have luckily started to recover in the past year. Rate growth that was almost nonexistent until it recently rose from single digits to double digits during the time it was under contract. That meant Moody was willing to pay a higher value based on the cash flow. The owners saw it as a win, as they do well in other commercial real estate and farming in Central Valley but weren't historically hotel owners and wanted out of the biz.

Houston-based Moody launched the REIT in the past 18 months, acquiring similar properties out of their TIC fund. Now Scott's marketing two other NorCal properties, the Mendocino Hotel and Hill House Inn and expects to take offers at the end of the month for the coastal town getaways. Our phone call was cut a little short so we could both watch Brazil and Germany yesterday (but really, what was the point). He himself wishes Costa Rica made it through, calling them the Cinderella story. Here he's with his wife at a much-deserved date night; the duo keep busy with their three kids all under three and their 11-year-old Swiss Mountain dog surprisingly keeps 'em on their toes, too. (Maggie still acts like a puppy in her later years; his theory is it's because she was the runt.)

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