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April 20--The Sheraton Madison Hotel, 706 John Nolen Drive, has been sold to a Tennessee company that specializes in commercial property development.

DeFoor Brothers Development of Chattanooga, a joint venture between brothers Ken and Byron DeFoor, purchased the property Tuesday from Waterton, a Chicago real estate investment company, and Marcus Hotels & Resorts, Milwaukee. Waterton, however, will manage the hotel, which will keep its Sheraton brand, said Cynthia Bock, Waterton senior vice president of sales.

"Through other business ventures, the DeFoor brothers truly found Madison to be a wonderful area to grow their business. They love that it is a capital and university city from a development and investment standpoint," Bock said.

DeFoor is planning a "significant multi-million dollar renovation" of the hotel, focusing on guest rooms and corridors, in the second half of this year, Bock said. Remodeling of the lobby and restaurant/bar will begin in January and should be completed by April 2018.

"We are very excited to be part of the Sheraton and be in Madison," Bock said, in an email exchange.

Terms of the deal were not disclosed, but documents filed with the Wisconsin Department of Revenue show the purchase price was $19.25 million. The last time the hotel was sold was in 2007, for $15 million.

The eight-story Sheraton was built in 1972 and has 239 rooms. According to the city assessor's website, the property is valued at $24.4 million for 2017, up from $8.1 million in 2016.

Hotel assessments consider revenue generated for each room as well as the value of the property itself, and the Great Recession put a damper on the travel industry for several years, said Laura Doherty, assistant city assessor-commercial supervisor.

She said assessments of all the hotels in Madison -- and of most commercial properties -- were lowered in 2010.

Now, though, things have turned around, so the property values of hotels were recalibrated. "The hotel industry in Madison is very strong," Doherty said. "We were seeing sales coming in well above our assessed values."

Marcus Hotels had been a minority owner in the Sheraton, with a 15 percent stake, and had managed the Sheraton but is no longer affiliated with it, said Joseph Khairallah, president and COO, Marcus Hotels & Resorts.

Marcus continues to own the Hilton Madison Monona Terrace.

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