The Bellevue Sheraton now has a new owner since Tuesday. The 179-room hotel, located at 100 112th Avenue N.E., was purchased from DHM Seattle Hotel by PMF Investments for $41.8 million, according to public documents. The building offers 102,562 square feet of space and sits on 4.77 acres, which makes it one of the largest hotel properties in the area.
Located in Downtown Bellevue's business district, the hotel is only nine miles from Seattle. Just off of I-405, it's also minutes away from Microsoft, Expedia, T-Mobile and Boeing. Originally built in 1979, the hotel received an update in 1994.
PMF Investments, a real estate firm based in Bellevue, has managed commercial, industrial and mixed-use projects throughout Washington, Oregon, California, Idaho and Ohio for 38 years, although its current holding are all in the state of Washington. According to the company's Web site, its investment strategy is focused building a portfolio based on strategic, long-term investing opportunities. PMF Investments was not readily available for comment.
According to a Kidder Mathews 2015 Fourth Quarter Hotel Market Research Report, the hotel market, like other real estate markets may be nearing the peak of the cycle. This phase is characterized by higher rates of occupancy, an escalation in room prices and an increase in hotel construction and transactions. The number of significant hotel sales in this region was the highest since the recession. In addition, eight hotels were completed during 2015, eight more are expected to open during the coming year, and at least 15 are under construction. However, in some markets, increases in supply are likely to outpace growth in demand, driving down occupancy rates and intensifying price competition. Over the next three years, as new hotel rooms open in the central business district of Bellevue, the current occupancy rate of 72 percent is expected to decline, as well.
This expected decline has led at least one project to be put on hold for the time being. Touchstone's Bellevue 600 project, which is planned to have two towers, one of which with a hotel, has been put on hold for now because of a concern for increasing vacancy rates and the amount of current construction in downtown Bellevue.
Market occupancy rates remained high in and near Seattle, according to the Kidder Mathews report. In Downtown Seattle, this was the fourth consecutive year with annual occupancy near 80 percent. High rates of occupancy also were achieved in North Seattle, SeaTac and Downtown Bellevue.