CEDAR RAPIDS — The company that bought a Holiday Inn Express in Cedar Rapids in late November plans to acquire hotels with 80 to 200 rooms in metropolitan areas with over 250,000 people, including Hilton, Marriott, Hyatt and InterContinental Hotels Group properties in “America’s Heartland,” according to a document submitted earlier this month.
Built in 1995, the 1.69-acre hotel property sits near Interstate 380. The hotel has 83 rooms and underwent a $1.5 million exterior and interior renovation project in 2016.
Filings with the U.S. Securities and Exchange Commission, including a handful earlier this month, show the hotel was the first of four properties acquired to date as part of Legendary Capital’s real estate investment trust, Lodging Fund REIT III Inc.
The hotel buyer formed the trust in April 2018, and in June that year started seeking to raise up to $100 million from investors. As of late June 2019, its gross proceeds were $32.4 million.
The company also owns hotels in Pineville, N.C., Eagan, Minn., and Prattville, Ala., which in combination with the Cedar Rapids hotel amount to 406 rooms in total.
“Our intent is to invest in both larger and smaller markets and create a diversified portfolio of historically steady performers blended with selected properties that have either been poorly managed or undercapitalized,” wrote Legendary Capital in its August Form 10.
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“Our intention is to build a diversified portfolio of hotel properties, complete certain property improvements and operate the individual projects with a final goal of selling the entire portfolio in a single transaction.”
A franchise agreement Legendary Capital signed in November 2018 allows it to use the Holiday Inn Express brand at its Cedar Rapids hotel for 10 years.
Management company National Hospitality Services, also of Fargo, N.D., now oversees the Cedar Rapids hotel, under an agreement with Legendary Capital.
Legendary Capital declined to comment Monday, saying the SEC’s Regulation D restricts it from publicly discussing its products.
Hawkeye Hotels previously paid $3 million for the Holiday Inn Express in January 2017.
The privately owned hotel management and development company currently owns 14 properties in Iowa, including Residence Inn by Marriott and Fairfield Inn and Suites locations both in Cedar Rapids and Coralville, and a Hampton Inn in Iowa City, in its portfolio of 44 hotels across 13 states.
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