Ted Hickman

The Boutique Hotel Business



“The price tag for the hotel was $200 million. My partners and I spent about $2.6 million to renovate the building, with the little touches like making sure it smells of fresh roast coffee beans taken care of by the interior designer we brought in. I think we spent an additional $1 million on bringing in one of the most impressive collections of architecture and art, like paintings by Claude Monet and Edgar Degas and pieces of sculptures by Rodin,” says Kelly Beswick, the founder of the Boutique Hotel Business. Beswick has listed two of her properties in Philadelphia (also known as the Hotel Bel-Air and Renaissance Hotel West Philadelphia) on the market this year: the Hotel Bel-Air and Hotel West Philadelphia. Beswick spent about $6.5 million to remodel her West Philadelphia boutique hotel into the boutique, six-story Hotel West Philadelphia. She took on a 24-month mortgage for about $3.7 million (with $0 down), then took out a 10-year mortgage for $4.4 million in August, according to the Philadelphia Inquirer. The hotel is a magnet for celebrities and VIP guests. On her website, Beswick says that the hotel has “a great community with people coming from all over the world and people working here as our staff.”

The Hotel Bel-Air is also on the market. According to the Philadelphia Inquirer, Beswick is looking to sell her 1,700-acre ranch in West Texas (originally owned by her family). You can use this website to find out how much the required contract work to customize it would roughly cost.

Hotel Venture Investors

Two investors are trying to get investors to purchase the Bel-Air Hotel and Hotel West Philadelphia. According to the Philadelphia Inquirer, David E. Birt and Kirk Sander are selling the hotel with an asking price of $185 million and an occupancy of 30% for the Bel-Air. The hotel has 140 rooms and just six suites and 84 parking spaces.

Beswick did not specify the Bel-Air’s current occupancy rate, but she told Forbes that the Bel-Air is about 97% occupied and 95% occupied for the Hotel West Philadelphia. Beswick has not said how much she is asking for the hotel, but Forbes reports that “she needs more than $125 million to close the sale.”

Hotel Investment Market

Some hotel investors are making similar investments, taking into account special needs for those hotels with a little more history and character, like how you might need the services of the best chimney restoration provider in the area. According to the Philadelphia Inquirer, Michael Castellino has listed two of his hotels for sale. The Hotel Bel-Air and Hotel Bel-Air West Philadelphia are both on the market for $65 million and $120 million, respectively.

Beswick says she made the decision to sell because “selling hotels now was an ideal time,” and she wanted to make sure she could invest in more of her properties.

“If I sold today I would be a millionaire and my retirement plan wouldn’t need to be worrying about my retirement. Right now I don’t want to be a millionaire because I am looking to turn these hotels into hotels that are beloved. I am looking to have hotels that people are walking into, because that is an investment in people.”

Hotel Valuation

Beswick is also trying to sell Hotel Bel-Air at a lower valuation. According to the Philadelphia Inquirer, Beswick told Forbes she lowered the valuations of the Bel-Air and Hotel West Philadelphia to help entice investors.

According to Forbes, the current valuation of the Bel-Air is $90 million, down from its original valuation of $200 million.

“My general rule of valuation is if I would get $10 million for it in five years, and then I sold the hotel for $10 million, I am not undervaluing it. And that is exactly what I did with the Bel-Air. The Bel-Air was originally undervalued to attract buyers. It went for $55 million and we sold it for $65 million, so I am calling that a double,” says Beswick.

The Bel-Air’s value is approximately the same as the Hotel Bel-Air West Philadelphia. The Bel-Air’s valuation is approximately $120 million, down from its valuation of $140 million.

Forbes says that Beswick and her team are trying to be more transparent in their valuations of her properties, but some investors will still likely go with a higher valuation to increase their returns. Beswick says the valuations are calculated by using “statistical analysis” to determine how much the properties can potentially be worth.

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