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Douglas Development has sold a downtown hotel it developed four years ago.
Richmond-based Apple Hospitality REIT purchased the 13-story AC Hotel Washington DC Convention Center at 601 K St. NW for $116.8M, the buyer announced Wednesday.
D.C.-based Douglas, one of the most prominent landlords in the downtown area, delivered the 234-room hotel with Marriott's AC Hotels brand in October 2020. The pandemic complicated the hotel's opening, and it began operating at a fraction of normal staff to make up for roughly 30% occupancy levels and increased costs for public health measures.
The city's hotel market has since recovered to average 69% occupancy in fiscal year 2023, according to D.C. government data. That was up from 57%, 34% and 42% in the prior three fiscal years.
This is the first hotel acquisition in the District for Apple Hospitality, though it owns three hotels in the suburbs: a Hilton Garden Inn in Silver Spring, the Courtyard Alexandria Old Town/Southwest and the SpringHill Suites Alexandria Old Town/Southwest.
The REIT owns 224 hotels totaling 29,900 rooms in 37 states, according to its announcement. It had been looking at establishing a presence in downtown D.C. for “some time,” the company’s president of real estate and investments, Nelson Knight, said in the release.
“With a wide variety of demand generators, including government, corporate, conventions, sporting events and concerts as well as both domestic and inbound international leisure, we are confident Washington, D.C. is well positioned for continued growth,” he said.
The sale hadn't been recorded in D.C. deed records by the time of publication. Douglas Development didn't respond to a request for comment on the deal.
This is the third Marriott-flagged hotel Douglas has sold in less than three years. In 2021, it sold Moxy D.C. Downtown, between Metro Center and McPherson Square, and Courtyard Dupont, which it had purchased two years prior. The two hotels sold for a combined $152M.
The developer has been working to obtain financing to build a new Securities and Exchange Commission headquarters in the nearby NoMa neighborhood after being awarded the federal lease in 2021. But that effort has proven difficult as the capital markets have soured on office, and the agency in October signed a five-year extension at its Station Place home.
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