Argosy Exits Days Inn Atlanta
We are pleased to announce that Argosy Real Estate has exited its investment in the Days Inn Downtown Atlanta hotel. On July 19, 2012, the Days Inn was sold to a partnership between Banyan Investment Group and DeBartolo Development. The property includes a 10-story, 263-room Days Inn hotel constructed in 1982. The 3.1-acre site spans an entire city block within the central business district of downtown Atlanta and is within walking distance of a variety of business, leisure, and convention demand generators.
On February 14, 2012, Argosy made a controlling equity investment in a partnership formed to purchase a portfolio of distressed mortgage notes secured by three properties, including the Days Inn hotel. Argosy formed the partnership with Peachtree Hotel Group (“Peachtree”), who acted as the operating partner. Peachtree is a vertically-integrated hotel owner, manager, and developer based in Atlanta, with properties located throughout the Southeast.
The mortgage notes were acquired for a significant discount to the outstanding principal balance. Simultaneous with the note acquisition, the partnership negotiated a deed in lieu of foreclosure for the hotel and sold the two non-hotel properties to a separate entity which reduced the acquisition cost basis of the hotel.
Following the acquisition, Peachtree took control of the hotel’s management and stabilized the property as a Days Inn while various business plan alternatives were considered, including an immediate sale of the asset, a modest renovation with improved management while waiting for a real estate recovery, or a full repositioning and rebranding of the hotel. The purchase offer from DeBartolo represented the most attractive risk-adjusted return for the partnership.