The Final Four: College basketball’s brightest stage boosts Minneapolis hotels

It wasn’t just the University of Virginia who won big at this year’s Final Four in Minneapolis. Hotels throughout the region saw significant boosts in Average Daily Revenue (ADR) and Revenue Per Available Room (RevPAR) in April 2019, according to newly released data from STR Global.

Across the Twin Cities, demand increased 4.6 percent in April compared to last year, while supply increased just under 3 percent. ADR was 15.1 percent higher than April last year, at $134.86.

And when you focus on Minneapolis specifically, the gains were even stronger.

In the CBD, ADR was up more than 26 percent, at $192.56. RevPAR hit $134.47, which is up 24.2 percent from April 2018. While the Final Four only lasted a few days, the 94,000 estimated visitors for the event are a significant boost for a downtown market with about 9,000 hotel rooms in all, and likely provided much of that pricing lift. There are about 40,000 hotel rooms in the Twin Cities, according to STR data.

The Minneapolis North and Bloomington markets also likely saw some lift from the college basketball final. The former saw a significant demand increase, up 8.5 percent from last April, while occupancy ticked up 4.6 percent. Bloomington’s occupancy in April jumped 4 percent over last year.

As Minneapolis-St. Paul continues to enter the running to host other significant sporting events and conventions, it’s to be expected that hotel revenue, and usually occupancy, will see a lift as a result. In another significant example, the Super Bowl pushed occupancy over 92 percent for three days with ADR at more than $350. RevPAR increased more than 600 percent year over year during the three-day Super Bowl weekend.

How’s the market doing outside of the Final Four? Things have moderated a bit. In the Twin Cities market, occupancy is down about 3 percent, while ADR is down 7.1 percent from year-to-date numbers in 2018. Of course, much of that is due to the significant early-year bump in 2018’s numbers from the Super Bowl. Statewide, the market has also slowed a bit, with occupancy down 1.6 percent and ADR down 4.5 percent. Overall, the market continues to see increased demand thanks to economic growth throughout Minneapolis-St. Paul and the country as a whole. The market has softened a bit thanks to the increased supply brought by developers over the past several years.

But there’s reason to be optimistic heading into the summer, with the whole market posting a strong April that included Twin Cities increases in occupancy, ADR and RevPAR, as well as state-wide increases in those three categories. As consumers continue to travel, there’s every reason to believe the market has a strong summer ahead.

MN startup aims to cut hotel building costs with $20M modular-construction factory

The Twin Cities marketplace has been slow to embrace the modular commercial construction trend that has become a hit on the coasts. One reason is a lack of companies with nearby plants that have the capacity to build large-scale projects using modular construction.

Minneapolis-based Rise Modular aims to change that. The firm has a purchase agreement in place to buy a 150,000-square-foot Owatonna plant that would be operational by year-end.

Rise anticipates it will be able to build hotels and apartments for 5 to 10 percent less than the cost of traditional construction; when factoring in time savings, that number could jump to 20 percent.

Click here to read the full article recently featured in the Minneapolis/St. Paul Business Journal.

MN North Shore Resort Portfolio Sells

The North Shore resort landscape changed dramatically this month as developer Bob Ryan sold all six of his resort properties and management business to a partnership of Minneapolis-based private investment firm and a Brainerd hospitality company.

The portfolio includes Grand Superior Lodge in Two Harbors, Caribou Highlands in Lutsen, Beacon Pointe Resort in Duluth, Breezy Point Cabins in Two Harbors, Larsmont Cottages in Two Harbors and East Bay Suites in Grand Marais.

Click here to read the full article recently featured in the Minneapolis/St. Paul Business Journal.

Delta Hotel by Mariott in Menomonee Falls

Hostmark Hospitality Group, a Schaumberg, Illinois-based hotel operator is renovating and rebranding the Radisson Hotel in Menomonee Falls, WI.  The newly branded Delta Hotel by Mariott will become the second location in Wisconsin, joining the property in Racine.  The $2.8M project will include a $300K renovation and renaming of the approximately 6,100 SF RBG Bar & Grill into the Waterlin Coffee Bar & Bistro.

Click here to read the full articled featured in the Milwaukee Business Times.

U.S. Lodging Outlook Remains Stable

The Q1 2019 edition of the PwC Hospitality Directions reports that the U.S. lodging industry is expected to stay stable through 2020.  Although the company did note that continued trade tensions and effects from possible tarriff-rate implementation as well as heightened political uncertainty, slowing economic growth and tempered investor confidence could change that outlook at any time.

Click here to read the full article featured in HotelBusiness.

Cushman & Wakefield Arranges $11.4M Sale of Woodbury La Quinta

The Cushman & Wakefield team of Ronn Thomas and Tim Storey represented seller Burywood Properties LLC in the sale of the 108-room La Quinta by Wyndham hotel at 700 Bielenberg Drive in Woodbury. The sale closed March 28.

Thomas and Storey listed the property, which sits on the northeast quadrant of Interstate 494 and Tamarack Road, and received strong interest in the hotel, which opened recently.

“It’s a seller’s market for strong hotel properties in the Twin Cities,” said Thomas. “We received a half-dozen offers for this property alone, and many inquiries beyond that.”

This is the 3rd hotel the Cushman & Wakefield Midwest Hospitality Team has sold in the I-94/I-694/I-494 submarket since 2017.

Crowne Plaza in Wauwatosa sells for $30 million

The 198-room Crowne Plaza Milwaukee West hotel in Wauwatosa, WI, was purchased by the Massachusetts-based REIT, Hospitality Properties Trust (HPT) for $30 million (approximately $151,500 per key). HPT purchased the hotel roughly a year after Atlanta-based Peachtree Hotel Group bought it for $24.5 million.

Click here to read the full articled featured in the Milwaukee Business News.

North Loop Apartment Development Transitions to Condos & Short-Term Rentals

Minneapolis-based developers United Properties and Greco have switched their focus of the 57-unit Sable project attached to The Nordic, an office and retail project at 729 Washington Avenue North in the popular North Loop neighborhood.  Originally slated as an apartment project, the developers have instead opted for condos targeting buyers who would use them for short-term rentals.

Click here to view a recent article in The Minneapolis-St. Paul Business Journal.

New Bar & Grill for Madison’s Hotel Indigo

The majority owners of Madison’s two Eno Vino’s tapas and wine bars opened Palette Bar and Grill in May, serving breakfast and dinner. It is located on the ground floor of the new Hotel Indigo, which was originally the historic Mautz Paint warehouse. Hence, the name of the restaurant is a play on color palettes and taste palates. Look for upscale dinner menu items such as lobster bites with mango sweet and sour sauce, green apple slaw and mostarda aioli at this restaurant located at 901 E. Washington Ave.

Click here to read the full article featured in the Wisconsin State Journal.

Omaha Riverfront Continues to Experience Change

The Gene Leahy Mall in Omaha, NE, will be risen to street level as part of a $290 million revamp with trails, an urban beach and play areas along a 90-acre swath of downtown Omaha. Next door, the Conagra campus is in the first phase of a multiyear, $500 million project as well.

A wave of new apartments are also set to open this year at River’s Edge on the Council Bluffs side of the river.

Click here to read the full article published by the Omaha World-Herald.