Business Real Estate Weekly of Arizona
Chandler – After four years in the making, the Marriott-Chandler hotel and conference center is finally set for development within the Allred Park Place business park located along the Price Road Corridor in Chandler. The 264-room, full-service hotel is being developed by a joint venture formed by Winegardner & Hammons Hotel Group LLC (WHG) in Cincinnati, Ohio (Mike Conway, chairman).
Construction on the eight-story building is expected to start in the next few weeks, with completion anticipated by the first quarter of 2019. Western & Southern Financial Group in Cincinnati (John Barrett, chairman) is a partner in the deal with WHG.
The venture has now completed the acquisition of the 7.17-acre hotel site, which is at the southwest corner of Price and Willis roads. Price Road Hotel LLC (WHG/Western & Southern entity) paid $5 million ($16 per foot) to purchase the property. The seller was CAZ 5 LLC, formed by Douglas Allred Co. in San Diego, Calif. (Douglas Allred, David Allred, principals). The cash transaction was brokered through Mark Krison, Luke Krison, Michael Strittmatter and Brad Anderson of CBRE in Pheonix. Plans for Marriott-Chandler include 20,000 sq. ft. of meeting and conference space, a 24-hour M Club lounge, restaurant, bar, outdoor pool and patios, business center and fitness center.
Development cost (land and building) estimated at $60 + million. Maricopa County records show the WHG venture is developing the project with a $30 million loan from Fifth Third Bank.
The hotel and conference center, which includes a 10,000-square-foot ballroom, is bringing a much-needed amenity to the Price Road Corridor. While the area has several limited service hotels, industry professionals say none of the existing hospitality properties have meeting space to accommodate larger-sized groups. Upwards of 1,000 guests will be able to be seated in the Marriott-Chandler ballroom, which will be the centerpiece to the planned hotel. “The one type of property the Price Road Corridor doesn’t have is a full-service hotel with significant conference space,” says Valley hospitality sales executive Bill Murney of HREC Investment Advisors in Pheonix.
Murney, who has been selling hotels in the Pheonix market for more than three decades, says WHG’s success likely will depend on there being enough demand in the area to provide Marriott with groups that are willing to pay a higher rate to stay in a hotel where they can also hold their meetings. “I think they will do well given that positioning opportunity, and I believe there will be adequate demand to drive the rate they need to generate the projected bottom line they are trying to achieve.” Although the hotel will have the Marriott brand and the rooms will be booked through its reservations system, it will be managed by the privately-owned WHG.
Winegardner & Hammons Hotel Group is an affiliate of Pyramid hotel Group (PHG) in Boston, Mass. The Marriott-Chandler will be the first hospitality property in the Pheonix market for WHG, which manages 20 hotels across the U.S. Pyramid Hotel Group, a third-party manager of 71 hotels, manages The Wigwam resort in Litchfield Park, Hilton Garden Inn Phoenix Airport North in Phoenix, and the Graduate Tempe hotel in Tempe. To date, Douglas Allred Co. has developed and leased 615,901 sq. ft. of office and flex space in seven buildings at Allred Park Place. The mixed-use project, located south of the Loop 202 (Santan Freeway) where it intersects with Loop 101 (Price Freeway), is planned for office, retail and hotel uses. The CBRE agents have the marketing assignment and are looking for tenants to lease roughly 350,000 sq. ft. of Class A office space planned in two more structures that should be under construction by year-end. Find out more from Conway at (513) 794-2462. Talk to the Allreds at (858) 793-0202. Reach the CBRE agents at (602) 735-5555. Call Murney at (602) 732-4777.