[caption id="attachment_217848" align="aligncenter" width="1200"] The Courtyard by Marriott Wilmington Downtown, a 126-room hotel that caters to business travelers, has hit the market for the first time in decades. | PHOTO COURTESY OF COSTAR/SVN MILLER[/caption]
WILMINGTON – The Courtyard by Marriott Wilmington Downtown has hit the open market, seeking a deal worth up to $18 million.The city’s downtown central business district has seen a few of its hotels change hands in recent years, including local major developer Buccini/Pollin Group acquiring the historic Hotel du Pont in 2017 and Virginia-based Excel Group purchasing the Residence Inn Wilmington Downtown a year later.Meanwhile, the Riverfront has seen the majority of the hotel growth in the city with three hotels sprouting up in the past decade.The 126-room, 10-story Courtyard Wilmington located at 1102 N. West St. has been owned by the Ciccone family for 35 years, according to county land records.Gregg Marzano, an advisor for SVN Imperial Realty, the real estate brokerage listing the property, said it’s the only hotel that the family owns. They converted it to a Courtyard by Marriott in the 1990s – it had been an office building at one time. Now nearing retirement, the family is looking to move the property that was last renovated in 2014, he said.“The hotel had a very successful 2017, ’18 and ’19 and then COVID, obviously, kind of reset the bar,” Marzano said.The brokerage is listing the property at a capitalization rate of 8.5% on 2019’s net operating income, seeking a sale between $15 million and $18 million depending on negotiated capital expenses.The lingering effects of the COVID-19 pandemic, and the potential impact of new variants like omicron, leave some questions about the interest in the hotel investment market. In recent months, bookings at the hotel have been on the rise though, Marzano said.“Weekends have come back gangbusters, actually outperforming any numbers they’ve done historically in downtown Wilmington,” he said, noting that occupancy rates have run north of 80% on weekends over the last four months. “If midweek comes back to 70% or 80% occupancy, that hotel is going to be in a really good spot at the end of COVID.”The hotel is still awaiting a larger influx of corporate business stays, but law firm visitors are booking and the Courtyard is seeing a bit of a “Biden bump” from staffers, security and more who accompany the president on his many visits home, Marzano said.A potential benefit – or stumbling block to some investors – is that the Marriott-branded hotel is also managed by the hotel chain. That allows an investor to buy into the property without having to worry about staffing and operating it, but some investors prefer to have operational control of their assets as well.“This hotel is really for an institutional investor or a private investor that really just kind of wants to see a check at the end of the year and their investment appreciate over time,” Marzano said.Although some downtown buildings have seen new leases on life, turning offices into hotelsand apartments, and the former Sheraton Suites South outside of the city was turned into New Castle County’s homeless shelter, Marzano doesn’t believe the Courtyard will be changing its focus. In part because Marriott’s long-term management agreement would entangle a change, the hotel’s rooms don’t lend themselves to an easy apartment conversion and there’s plenty of vacant office space in the city already.