In October 2008, the 141-unit International Inn in Hyannis, MA sold for $5.8 million. The sale was handled by Carey Commercial. Chuck Carey, principal of the Cape Cod commercial real estate and business opportunity brokerage firm bearing his name, shares with us his behind the scenes perspective on this notable transaction.
What can you tell us about the International Inn?
The 141 unit hotel actually had 175 units back in the 70’s and 80’s. It was bought in 1985 by Arthur Rittel who re-constructed the building over and over combining rooms into suites and then even larger and more dramatic suites. Many of the rooms have huge flat screen TV’s, columned bathrooms, Victorian furniture and 15 inch crown moldings.
These rooms combined with the power marketing of the Cuddle and Bubble theme produced the highest grossing hotel in the Hyannis area for many years. At the time of the sale, however, other hotels in the area had taken market share. The decline was a sign of the complete obsolescence and failure of print media advertising which the operation relied upon.
You have brokered the sales of numerous lodging properties on Cape Cod since the 1990’s. Why is this hotel sale significant?
The sale of the International Inn was a major event for Hyannis and Cape Cod. While the press makes comparisons to the Great Depression and predictions of a 1929 style crash, there are people who are still endeavoring to do business and carving out a path.
At $41,135 per key, the sale price ranks up there based on historical price levels. What are your thoughts on that?
The income at the time of the sale did not justify the price. But the owners are very experienced and the elements of success are clearly there. That is what the real story of this sale was, the positive venture in a time when the press is playing Chicken Little.
The 3.17 acre property is exempt from the Cape Cod Commission which means that it is not obstructed from having a new building of up to four stories with a parking garage under. There are only two small territories on the Cape which have been granted this immunity. So far it has led to the construction of several commercial / residential buildings and a new Hampton Inn.
So there are intrinsic options with the property itself but the reason for the purchase was to rejuvenate a uniquely themed operation which had lost it’s dominant position.
What are some of the additional transactions details?
The buyers own a Hampton Inn and a Super Eight in Stamford, CT as well as three hotels in India. There are several partners in the venture and they have stated that they consider the theme distinctive and plan to keep it.
The sale was financed by $3.0 Million from The Community Bank, arranged personally by Eric Bancroft along with $1.9 Million from Matt Collins through an SBA Lender, Granite State Development. The property was valued in 2004 at $10.4 Million.