Sheraton Wilmington South headed to auction
NEW CASTLE – The Sheraton Wilmington South is headed to auction next month with a starting bid of $5.5 million.
The 192-room Sheraton located at 365 Airport Road off Interstate 95 will be on the block in an online auction from Oct. 26 to 28. It is owned by Pennsylvania-based HHM, a publicly traded real estate investment trust formerly known as Hersha Hospitality Management, which bought the hotel in 2010 for $15 million, according to county land records.
The six-floor hotel completed a $6.4 million renovation that upgraded its guestrooms, guest bathrooms, common areas, events space, mechanical and technology systems in May, amid the worst of the COVID-19 pandemic’s economic impact.
In a typical year, the hotel attracts a mix of leisure, education and stable corporate business, including from nearby colleges, sports and entertainment venues, the New Castle Airport, and established corporate tenants, such as Accenture, Ernst & Young, J.P. Morgan & Chase, and KPMG, among others, according to Jones Lang LaSalle (JLL), the real estate brokerage representing HHM in the auction.
The Sheraton is likely suffering like all hotels through the pandemic, which has canceled events, curtailed corporate travel, and discouraged leisure vacations for many. According to the Delaware Hotel & Lodging Association, hotel occupancy in New Castle County was down about a third through July compared to 2019. The county’s revenue per available room, the key industry metric that multiplies the average daily room rate by the occupancy rate, is down by nearly 50% through July.
JLL reported that the Sheraton had a 59.2% occupancy as of the end of last year, suggesting that when travel returns to normal levels it would have strong support. The hotel is the frequent host of conferences and events in the greater Wilmington area.
The hotel’s story stretches back more than a decade before its 2011 opening, when the project was started as a Radisson by Joseph L. Capano Sr. Built in a floodplain, the hotel was not allowed to open for years after it was determined that it was built roughly a third larger than permitted.
Capano’s interest in the hotel was transferred to Florida-based Republic Bank through bankruptcy and after a series of sales ended in the possession of HHM, which also owns the Residence Inn in Wilmington.
By Jacob Owens