|By Jeff Swiatek, The Indianapolis
StarMcClatchy-Tribune Regional News
May 12--Could Fred Klipsch's next investment be the Canterbury Hotel in Downtown Indianapolis?
Klipsch, whose Indianapolis holdings have included movie theaters, medical buildings and the Klipsch Audio loudspeaker company, said Friday that he and partners "had some initial interest" in the privately owned hotel, which is for sale.
"It would be premature to consider us a buyer of the Canterbury," he added.
Klipsch, 66, who heads the Indianapolis-based Klipsch Group, certainly would seem to have access to cash to invest in the 99-room boutique hotel, considered one of the city's finest lodging spots.
Last year he and partner Charles Lanham sold a real estate investment trust they co-founded, Windrose Medical Properties Trust, for $877 million.
The hotel's controlling partner, Donald Fortunato, said he wants to keep the hotel in local hands and hopes to be able to talk about a sale within a month.
The 12-story building opened in 1928 and was redeveloped into a luxury hotel in the early 1980s by Fortunato and the late Fred C. "Bud" Tucker Jr.
"I am getting older, and it's time for me to pass the baton. I feel I owe it to Bud to make sure some local people are involved in it," Fortunato said.
Fortunato, who lives in Northfield, Ill., near Chicago, refused to discuss potential buyers.
Located in the heart of the city's entertainment district, at 123 S. Illinois St., the hotel is next to St. Elmo Steak House and contains a private connection to Circle Centre mall. Celebrities and others favor its exclusivity, high level of service and plush accommodations, which include Chippendale four-poster beds and chocolate truffles on the pillow.
But independent hotels often find it tough to compete against larger name-brand chains with more amenities such as pools and spas and national reservations systems that reel in out-of-town guests.
Hotel general manager Mark McClure didn't return calls for comment.
The Canterbury is well- positioned to compete for lodging nights with convention groups, business travelers and others in Indianapolis, said Michael Arnold, a partner at the Worthington Group, an Indianapolis hotel consulting and management company.
"You've got location. You've got history. You've got a unique market," he said. "I think it will have every opportunity to be (successful)."
Limited-service, midsized hotels currently sell for $8 million to $12 million in the Midwest, he said, while high-end boutique hotels could go for more.
Star reporter John Ketzenberger contributed to this story.
--Location: 123 S. Illinois St., Indianapolis.
--History: Built in 1928 by Illinois and Chesapeake Realty Co. for $650,000 and called the Lockerbie Hotel. Purchased by Glenn F. Warren in 1936 and renamed the Warren. Acquired in 1983 by Fred C. Tucker Jr., Donald Fortunato and Gunner Nilsson and converted into a boutique hotel.
--Rooms: 99, including five bi-level penthouse suites and one presidential suite.
--Room rates: $199 to $429.
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