June 25–A Chesapeake-based firm has purchased two hotels in the Fort Eustis area of Newport News.
LAP Groups tendered the winning bid during a Monday foreclosure auction for the Mulberry Inn and Holiday Inn Express at 16890 Warwick Blvd., said Sanjay Patel, president of the firm’s retail and petroleum operations on Wednesday.
The firm purchased the 101-room Mulberry Inn and 57-room Holiday Inn Express in a block auction for $4,000,005, Patel said.
Officials expect to close on the property during the first week of July.
While the firm is not ready to immediately release plans for the hotels, Patel said officials are conducting a three- to six-month evaluation of the properties — possibly resulting in rebranding the two properties under a new hotel flag.
“We’ll make that determination as we conduct the evaluation,” Patel said.
The auction, which was handled by Richmond-based Kepley Broscious Biggs PLC, received a starting bid of $4 million from its original lender — Wells Fargo.
LAP Groups owns and operates 12 hotels across the Southeast and Hampton Roads, including operating a 20-year long-term lease for the Grand Ocean Hotel in Virginia Beach. The group also owns and operates a number of Happy Shopper gas station and convenience stores across the region, as well as several Subway, Taco Bell and Tropical Smoothie Cafe franchises.
Patel said the firm is currently in growth mode, and has plans to acquire additional hotels in the region — although he would not disclose the locations the firm is targeting.
“The pricing is really good,” Patel said of the hotels’ price. “Normally, for this kind of package it would go for $8 to $10 million, so we feel we got them for a good price. Plus the distance to Fort Eustis and Langley [Air Force Base] made it a good investment.”
This is the fourth hotel to be sold in Newport News in recent months.
North Carolina investor Dilip Mehta secured the top bid of $2.57 million for the Point Plaza Suites and Conference Hotel at 950 J. Clyde Morris Blvd. this month. In May, Virginia Beach-based Plaza Resort Management submitted the winning bid of $5.11 million to purchase the Holiday Inn and Suites at 941 J. Clyde Morris Blvd. — a property located directly across the street from the Point Plaza Hotel Suites and Conference Center.
