Sheraton Inner Harbor

Hotel Investment Opportunity Overview

Cushman & Wakefield (“C&W”) has been exclusively retained to offer for sale the fee simple interest in the 338-room Sheraton Inner Harbor Hotel. The Property is located in the heart of Baltimore’s Inner Harbor neighborhood strategically connected to the adjacent Baltimore Convention Center, and proximate to Camden Yards Sporting Complex and the CBD’s 12.4 million square feet of office space. The Property is non-union, is the only hotel connected to and located on the same block as the convention center, features a parking operation that generated $1.3 million in annual departmental profit, and includes a land parcel with development potential totaling over 350,000 square feet of gross buildable area.

The combination of the Property’s highly desirable location in the expanding CBD, the strong lodging market, renovation upside potential, numerous value-add opportunities, and the marketing ability of the internationally recognized Marriott family of hotels, as well as the development potential included in the collateral, renders this one of Downtown Baltimore’s best hotel investment and development opportunities

Investment Highlights

• Direct Connection to Convention Center - The Property benefits from its direct connection to the Baltimore Convention Center, capitalizing on the 125+ events per year that attract over 500,000 attendees annually. While not finalized, there are plans for a major renovation in the coming years. The Hotel is the only hotel connected to and located on the same block as the convention center.
• Profitable Parking Operation - The Property features a 525 space parking operation that generated $1.7 million of departmental profitability in 2019. The facility includes a standalone, adjacent eight-level parking garage that serves as one of two primary parking facilities for the adjacent Baltimore Convention Center.
• Additional Development Potential - The collateral includes an .89 acre surface lot that can support approximately 350,000 square feet of gross buildable area. The zoning supports a variety of uses including office, parking, hotel and/or residential with few height and site restrictions.
• Institutional Hotel Product - The 15 story Hotel features 338 institutional-quality guestrooms, approximately 23,000 square feet of premier meeting and event space, and two destination full-service restaurants, including the iconic Morton’s The Steakhouse.
• Shrinking CBD Supply - Since the beginning of the pandemic, the CBD submarket lost 988 rooms due to the permanent closure of three prominent, full-service hotels: Embassy Suites Inner Harbor (300 keys), Radisson Hotel Baltimore Downtown (323 keys) and Holiday Inn Baltimore Inner Harbor Downtown (365 keys). These recent closures represent 10.8% of the submarket’s total supply and 20.0% of the CBD’s competitive upper-upscale and luxury supply, creating a unique opportunity for the Sheraton Inner Harbor to absorb displaced demand as a directly competitive full-service property.
• Harborplace Redevelopment - It was announced in April 2022 that Harborplace, the centerpiece of the Inner Harbor, is set to undergo a comprehensive renovation plan that will revitalize the waterfront retail and entertainment complex, and transform downtown Baltimore.
• Camden Yards Renovation - The Maryland Stadium Authority plans to spend $1.2 billion on improvements to Ravens M&T Bank Stadium and Oriole Park at Camden Yards and, which will lock in the NFL Ravens and the MLB Orioles to long-term leases.
• Government Agencies Moving Downtown - In May 2022, Maryland lawmakers announced $166 million in state funding for the city's downtown and Inner Harbor, including $50 million for the relocation of state employees from State Center to the CBD. The continued relocation of state agencies from midtown to downtown will help to further improve office vacancy rates and generate hotel demand.
• Strong Future Convention Calendar - The convention center features a strong future pace report, and a new comprehensive renovation plan is being reviewed for approval by local and state authorities, which if implemented will further improve city-wide bookings.
• Renovation Upside Potential - Between 2016 and 2019, the Hotel consistently boasted an approximate 94% RevPAR penetration compared to its competitive set, which is impressive considering that the Hotel featured a relatively dated hotel product. Following a comprehensive renovation, the Hotel will have the potential to stabilize at RevPAR penetration levels well above 100%.

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