Room Boom: Mane Attraction

The former Red Lion Hotel on Fifth Avenue in downtown Seattle sold in June for more than $130 million, a hefty amount netted by seller Lowe Enterprises of Los Angeles shortly after it departed Red Lions franchise group. Lowe, which bought the property from Red Lion three years ago for $71 million, extensively remodeled it and rebranded it as the Motif Seattle. The hotels new owner is Cornerstone Real Estate Advisers of Connecticut.

Red Lion also has listed for sale its exterior-corridor, 181-room hotel in Belle-vue. But far from signaling an exit from the Seattle area, Red Lion Hotels Corporation CEO Greg Mount says these moves by the Spokane-based company are part of the firms effort to find new downtown sites consistent with expansion plans.

Well not only pay down some debt, but well also reinvest in additional hotel acquisitions in both the Seattle and Bellevue markets, Mount asserts. With the strength in the hotel market in Seattle, demand is obviously strong and Seattle is among specific cities were focusing on.

Red Lion has a new strategic plan to expand in major metropolitan areas, from San Francisco in the West to major cities in the East. Its a U-turn for a company that traditionally has operated in small and midsize western cities. Most of its 53 hotels are in secondary and tertiary markets with higher seasonal demand fluctuations, although a few are in bigger markets such as Anaheim and Salt Lake City.

Were looking at a number of fronts as we rebuild and retool our platforms, Mount says. In Seattle, we actually have a very aggressive push to locate either a hotel or a building for adaptive reuse. We also like the central core of Bellevue. While we love the location of the Bellevue Red Lion, we feel there are some [other] downtown locations well look at.

Another option in Bellevue would be to partner with a buyer who wants to build a modern hotel on the current 6-acre Bellevue site and have Red Lion operate it, Mount says. The property at 11211 Main St. is adjacent to a planned stop along Bellevues light-rail route.

In downtown Seattle, Mount says converting a former office building into a Red Lion might be more attractive, given the current pricing for hotels. Its precisely what the company did in 1995 with the Fifth Avenue site, converting a former U.S. Bank building into a Cavanaughs Hotel, which begat the WestCoast Grand, which begat the Red Lion, which begat Motif Seattle. Mount says Red Lion Hotels will likely seek to own a property downtown while also expanding on the citys fringe through franchising.