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Buccini/Pollin Group sold this Hampton Inn & Suites to a Washington, D.C., investment firm for nearly $17 million last month. | DBT PHOTO BY MIKE ROCHELEAU[/caption]
CHRISTIANA – The Buccini/Pollin Group (BPG) recently sold its Hampton Inn & Suites Wilmington Christiana hotel to an upstart real estate investment firm headed by a former associate.
District Lodging Capital (DLC), co-founded last year and led by David Duber, acquired the 136-room Hampton Inn for more than $16.9 million on July 8, according to county land records. That translates to a purchase rate of just under $125,000 per room.
BPG had purchased the lot where the hotel stands today for a little more than $2 million in 2006, developing a contaminated boat storage yard into the brand-name hotel near a busy Interstate 95 interchange in 2015.
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Dave Pollin | PHOTO COURTESY OF BPG[/caption]
Dave Pollin, leader of BPG’s hotel acquisition, development and capital markets efforts, said the firm had “achieved their investment objectives” with the property and that the sale was a routine portfolio pruning to free up cash flow for other projects.
“We felt that the Hampton Inn had recovered so well from the effects of COVID, that it was essentially stabilized again … and it was time to leave the investment,” he told Delaware Business Times.
Pollin said that the Hampton Inn’s occupancy rates had risen in recent months due to the strength of the brand, its location and the hotel’s management efforts. The brand performs well with long-term business travelers, such as construction workers on highway and warehouse projects, and doesn’t depend as much on group bookings like other hotels do, he added.
BPG found an eager buyer in DLC, which was looking for a strong first deal to begin building out its asset portfolio.
The firm was familiar with Duber, who spent three years at BPG sourcing, underwriting, structuring, financing, and closing hospitality acquisition and land development deals, but the ties run even deeper. Duber graduated from Pollin’s alma mater, School of Hotel Administration at Cornell University, and interned with Pollin, who later actually bought Duber’s family home.
“He got a couple years of experience at CBRE and then he came to work for us, so I always said that he kind of conveyed with the house,” Pollin said with a laugh. “We have a connection that goes beyond just professional. I considered his family as friends.”
Duber is the son of Marc Duber, chief operating officer of The Bernstein Companies, a major Washington, D.C.-area developer of hotels and multi-family projects. After spending five years working at other firms, he co-founded DLC in D.C. with a strategy of targeting "select service and extended-stay hotels, predominantly Marriott Hilton branded, in secondary and tertiary markets that were home to state capitals, large hospitals or large universities." The firm financed its first acquisition with a $19.7 million mortgage from Stone Beach Capital, a New York City-based investment fund affiliated with Tilden Park Capital Management.
Duber told Delaware Business Times that he was interested in the Hampton Inn due to its proximity to the University of Delaware and ChristianaCare's campus, both of which are on strong trajectories in fitting with the firm's thesis. He said the firm was interested in making more investments in Delaware if they can find the right assets.
"Everyone's so focused on these tax-friendly states in the Southeast and Midwest, yet right here in the Mid-Atlantic we have a state that is open for business," Duber said, noting that North Carolina is another market of interest.
Pollin said the Hampton Inn deal was brokered off-market, benefitting DLC by keeping the asking price down and BPG by a lower profile asset sale.
“We hit a number that was below what we thought the value was pre-COVID, but one that still achieved our objectives,” he said.Â
Duber said DLC anticipates investing $1.5 million into a soft renovation of the hotel, including furniture, paint and flooring, among other cosmetic features, over the next year.
Meanwhile, Pollin said that BPG is focusing its local efforts on projects in downtown Wilmington, including the 203-unit Crosby Hill apartment complex off Shipley Street and a yet-to-be-named boutique hotel at 519 N. Market St., which will be managed by Method Co. of Philadelphia.
“We feel like the city's ready for that kind of next experiential hotel product,” Pollin said of the boutique hotel at the two-story Victorian Romanesque brownstone designed by Frank Furness. “I can promise you that when you walk in and see that historic building coupled with the design it’s really going to blow people away.”
