Friday, March 27, 2015

Fort Washington Holiday Inn sold, will undergo $19M redevelopment

by Natalie Kostelni, Staff writer for the Philadelphia Business Journal

A venture consisting of Haverford Hotel Partners and Haverford Properties Inc. bought the Holiday Inn Fort Washington and has plans to invest an estimated $19 million redeveloping the property.
Bill McNamara, managing partner of Haverford Hotel Partners, and Charles Houder, principal of Haverford Properties, picked up the 230-room, full-service hotel on seven acres in Montgomery County from a Washington, D.C., investor who has owned the property since it was developed in 1975. Joe McCann, head of Optimum Hotel Brokerage, arranged the sale.
Terms of the transaction weren’t disclosed though total investment in redeveloping the property, including acquisition costs, stands at about $19 million.
Though state-of-the-art when it was built, the property at 432 Pennsylvania Ave. had been on the decline and had a business that kept just about half of it occupied.
It wasn’t an easy sell, according to McCann.
“We had the property on the market for about a year and we had to go through a year of due diligence with zoning approvals being made,” he said. “The right buyer needed extensive due diligence because of all of the approvals that were needed for his project. It’s an expensive proposition, but it will be nice development.”
Aside from zoning, part of the process involved the seller shuttering the property and laying off its 61 employees. A redevelopment on this scale requires such a drastic measure.
Both McNamara and Houder were attracted to the hotel’s location near the Pennsylvania Turnpike and Route 309 as well as next to a regional rail stop. It’s also within the Fort Washington Business Park and in proximity to other markets such as Horsham, Willow Grove and Plymouth Meeting.
“The Pennsylvania Avenue corridor has been overlooked and neglected because of its historical issues,” Houder said.
The park was known to frequently flood whenever there was a downpour. That issue is being remedied.
The partnership looks for value-add opportunities such as this.
“We like to take something underutilized and reposition it to the product it wants to be,” said Houder, who, at one point, worked at Preferred Real Estate Investments.
Plans call for redeveloping the eight-story hotel inside and out. The façade will be redone as well as other exterior elements. It will no longer be a full-service property — having a restaurant within the hotel — and it will instead have 168 rooms and suites. It will be branded as a Holiday Inn Express.
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