|By Bryan Gentry, The News & Advance,
Lynchburg, Va.McClatchy-Tribune Regional News
Dec. 12, 2008 - --The developers of Lynchburg's Hilton Garden Inn have sold the hotel at a profit less than six months after opening its doors.
In late November, they closed the $15.5 million sale with Paragon Hotels in South Carolina.
Bruce Johnson, one of the developers who lives in Lynchburg, said the hotel has been doing very good business, and he was surprised to see it sell so soon.
"We weren't planning to sell it. It wasn't really on the market," said Bruce Johnson, one of the developers. "We built this thing to make money. It certainly came into being sooner than expected."
Michael Martin, vice president of operations for Paragon, said his company was attracted to the hotel for a number of reasons.
"We ... have several Hilton branded hotels. We like to partner with them," Martin said. "We feel that they're a great chain."
Also, "the market is doing very well in Lynchburg."
The hotel was developed by Johnson and two other investors, Norris Blanks, of Lynchburg, and Scott McAllister, of Apex, N.C. This year the hotel missed opening in time for college graduation weekend, which is the most- booked weekend at local hotels.
It finally opened in June. Since then, business has exceeded expectations.
The Wards Road hotel has an average daily rate of $120, Johnson said, meaning that the basic room prices average at $120 per night after applicable travel club discounts. The investors originally had expected an average daily rate of about $100, but a demand for the rooms allowed them to raise the price, Johnson said.
Also, the Hilton's occupancy rate is 70 percent, he said.
The owners' revenue goal for the year was met in September and surpassed in October, Johnson said.
In July the owners were surprised to find that someone was interested in buying the hotel. Ricky Patel, an official with Paragon Hotels, stayed at the Wards Road Hilton and made an offer. At first they weren't interested in selling, but eventually Patel "made us an offer we couldn't refuse," Johnson said.
The sale closed in late November. Lynchburg city land records said the real estate sold for $12.2 million. Johnson said the total sale price was $15.5 million, including fixtures and equipment.
Martin said buying the Lynchburg hotel gives Paragon the opportunity to partner with local universities and businesses. "There's not too much competition coming into the (Lynchburg) market over the (next) year, so it's an opportunity to lead the hotel market in Lynchburg."
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