W Hotel Buckhead

The W Hotel Buckhead in Atlanta, GA is a venture between Silverado Interests, and Woodbine. It is for the acquisition of an existing 291-room W Hotel. The W’s Peachtree Road address, which features a signalized intersection, is in the heart of Buckhead’s vibrant mixed-use district, an area thatincludes 13 million square feet of Class A office space, two premier regional malls (Lenox Square & Phipps Plaza), and 3,000 residential units. The hotel is just 500 feet from MARTA’s Buckhead station and provides guests with immediate access to GA 400.

High barriers to entry and limited supply risk, as available room supply in Buckhead has decreased at a compound annual rate of 1.4 percent since 2006, per STR. There is currently only one project (a 166-key AC Hotel) recently opened and no new projects under construction in Buckhead.

After the conversion to a W hotel in 2008, the asset began gaining significant market share as the market recovered. In 2012, W Atlanta Buckhead was second only to Mandarin in rate; however, all but one asset in the competitive set completed renovations over the last 36 months, which has led to a slow decline in rate at the W. The W is now in need of a comprehensive renovation of public areas, corridors, guest rooms, meeting spaces, and food and beverage outlets. This investment will allow the W Hotel to once again increase rate.

Investment Highlights:

  • Opportunity to acquire an institutional quality, lifestyle hotel at a basis below replacement cost, with a core location and substantial near-term upside.

  • Outstanding base of services and amenities, including Buckhead’s only rooftop bar, an infinity-edge pool overlooking famed Peachtree Road, a leased restaurant, and 11,000 square feet of meeting space.

  • Strong interest from residential developers to acquire the property’s adjacent surface parking lot to construct a residential tower. As of October 2015, there were over 3,200 multifamily units under construction in Buckhead, who are commanding rents north of $2.50 per square foot. Approximately 1,000 of these units under construction are in the immediate vicinity of the W Hotel.

  • Considerable rate upside is available. The Property’s location among Atlanta’s highest-rated hotels and the contemplated renovation should provide outsized growth against the competitive set.

  • The W is directly abutted by recently revitalized buildings and amenities, including the boutique Peachtree Lenox Building, Lenox Square Mall, Buckhead MARTA Station, and the luxury Shops Around Lenox.

  • Through the announced acquisition of Starwood by Marriott, the Property will benefit from access to an astounding 75 million rewards members (54 million Marriott Rewards + 21 million in the Starwood Preferred Guest program) and W’s contemporary, modern brand and ambiance gives it a significant competitive advantage.