Overview
HREC Investment Advisors has been retained as the exclusive advisor and is pleased to present the opportunity to acquire the 122-key Hampton Inn Minneapolis/Eagan (sometimes referred to as “Hotel” or “Property”) located in Eagan, Minnesota.
Eagan, Minnesota is strategically positioned along the Minnesota River, just south of Minneapolis and St. Paul. As the 6th largest city in the state and the largest in Dakota County, Eagan has transformed into a major business hub for the Twin Cities metropolitan area. The city specializes in management of companies and enterprises, finance and insurance, healthcare and social assistance, and retail trade. Eagan's proximity to the Minneapolis-St. Paul International Airport, which serves over 34 million annual passengers, enhances its accessibility and economic potential.
Recent years have seen extensive economic development in Eagan, with the Viking Lakes project standing out as a significant driver of growth. This 3.2 million square foot mixed-use development, which now houses the Minnesota Vikings headquarters and training facility, is expected to contribute $5 million to the local economy. The master plan for Viking Lakes, set to unfold over the next 15 years, includes office space, retail, a medical center, an entertainment center, and a new conference center. Eagan's location within the Minneapolis–St. Paul–Bloomington MSA provides convenient access to major demand generators such as U.S. Bank Stadium, the Mall of America, and the Target Center. The city's strategic position, coupled with its proximity to major highways and the airport, makes it an ideal location for business and leisure travelers alike.
Investment Highlights
- Dynamic Submarket of Minneapolis: The Hotel is ideally situated in Eagan, just ten minutes from the Mall of America and Minneapolis-St. Paul International Airport, with a shuttle service to these key destinations. Major employers in the area, such as Blue Cross Blue Shield of Minnesota and Ecolab along with attractions like the Minnesota Vikings' new headquarters, contribute to a steady demand for accommodations. Notably, Thomson Reuters recently relocated to a new campus in early 2024 that is even closer to the hotel, further enhancing the area's appeal as a significant business center in the region.
- Strategic Location in Twin Cities Metro Area: The Hampton Inn offers excellent visibility and easy access from I-35 and is situated approximately 1.5 miles from the I-35/I-494 interchange. Strategically positioned about 10 miles from St. Paul and 12 miles from Minneapolis along I-35, the Hotel offers convenient access to two of Minnesota's primary metropolitan areas.
- RevPAR Upside with Renovation: As of June 2024, the Hotel ranked third for RevPAR among the seven hotels in its competitive set. Following a thorough renovation, the Hotel is poised to stand out as one of the top limited-service assets in a prominent suburban market, driven by multiple demand generators.
- Upside from Replacing Existing Management: The Hampton Inn Minneapolis/Eagan presents an excellent opportunity for an investor to purchase the Hotel unencumbered by a management agreement. Investors have the chance to bring in a new management company or operate internally and revamp the operational strategy of the Hotel.
- Attractive Basis - Well Below Replacement Cost: The national average cost of building a hotel has increased significantly in the past few years. This Asset provides an investor with the opportunity to acquire a high-quality Property, unencumbered of debt, at pricing well below current construction costs (even after the completion of PIP).
- Fee Simple Interest
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