American Property Management buys OKC Sheraton: San Diego-based company enters market with $38M purchase
by Darren Currin
The Journal Record
4/23/2007


Journal Record Photo
OKLAHOMA CITY – One of the nation’s largest hotel owners and operators has entered Oklahoma City’s surging hotel market by acquiring one of downtown’s hotel landmarks. San Diego-based American Property Management Corp. has completed the purchase of the 395-room Sheraton Oklahoma City hotel for approximately $38 million, according to Oklahoma County records.

Oklahoma secretary of state documents showed American Property Management Corp. was one of the primary owners of the 31-year-old hotel. It was unknown if the new ownership consisted of any additional investor groups.

American Property Management Corp.’s purchase of the Sheraton marked the company’s first hotel acquisition in the state. The company has been honored several times in recent years by various hotel and real estate publications as one of the fastest-growing companies in the hospitality industry with more than 45 hotels nationwide. In 2006, the company was ranked by National Real Estate Investor as the 14th-largest hotel owner in the nation.

According to the company’s Web site, more than $350 million in annual revenue has been generated by its growing portfolio of hotels that includes such brands as Holiday Inn, Wyndham, Hilton and Sheraton.

At a price of $96,582 per room, Peter Holmes, COO of HotelBrokerOne in Oklahoma City, said the Sheraton’s purchase was yet another example of the premium national hotel investors have placed on Oklahoma City’s growing hotel market.

“Oklahoma City continues to be the target of acquisition for many national corporations, especially with many national business and hotel publications labeling Oklahoma City as ripe for hotel purchase or development,” said Holmes. “It was not that long ago that Oklahoma City was redlined on the map and it was hard to get national investors to look at Oklahoma City.”

Even thought Sheraton’s high purchase price will certainly turn heads, Holmes added that the price still remained below replacement cost resulting in what he called “a fairly marketable deal.”

“When you take into account it cost north of $200,000 a room for the Skirvin renovation and between $110,000 and $120,000 a room for the Renaissance, the Sheraton price was below those costs,” he added.

Located at 1 N. Broadway Ave., the hotel was purchased from Meristar Hospitality, a real estate investment trust that owns 57 hotels and resorts nationwide. Meristar acquired the hotel in January 1998 for approximately $28.5 million as CapStar Hotel. Meristar changed the hotel brand shortly after its purchase from the Medallion to Westin. In 2004, the hotel changed brands once again to its current Sheraton name.

Holmes noted that the hotel’s change in brand from Westin to Sheraton was more a lateral move and did not have much effect on the value of the hotel. However, he explained that the Sheraton brand does tend to fare a little better than Westin in this region of the country.

Originally opened in 1976 as a Sheraton Hotel, the 262,836-square-foot property has undergone several renovations since its inception, the most recent of which was completed in 2004, consisting of $8.5 million of interior renovations.

It was unknown if any major changes are planned for the hotel as representatives from American Property Management Corp. were unavailable for comment.