Michael Brenneman and Jeff Selby have sold Denver’s Hotel Teatro to DiNapoli Capital Partners of Los Angeles.
The purchase price for the 111-room boutique hotel was not released. However, hotel consultant Bob Benton said the property could have sold for between $16.6 million and $25 million.
“People are paying a lot of money for hotels with very low cap rates,” said Benton, whose firm is Robert S. Benton & Associates. “The market is strong and is expected to remain strong.”
Brenneman and Selby spent $18.5 million to open the hotel in downtown’s historic Tramway Tower building in 1999.
“Hotel Teatro is a beautiful hotel that has earned its place as Denver’s finest hotel,” said Matthew DiNapoli, chief executive of DiNapoli.
His privately held real-estate investment firm owns or manages 20 other luxury hotel properties, including several Four Seasons hotels.
Brenneman and Selby have been working for more than a year to finance a 50-story hotel-and-condo skyscraper across the street from the Hotel Teatro, 1100 14th St.
The project, which is expected to begin construction next year, will include a 230-room Four Seasons Hotel and 102 private residences. Benton said the proceeds from the sale of the Teatro could be used to finance it.
Mike Cahill, president of Englewood-based HREC-Hospitality Real Estate Counselors, a consultant to the hotel industry, said the Teatro could become a Four Seasons as well.
“From a guest-room perspective, they’re already pretty close to Four Seasons quality in terms of size and finishes,” he said.
Downtown Denver’s hotel market is in the midst of a major boom. Several new hotels are under construction, and existing properties are undergoing renovations, including a $75 million rehab of downtown’s Embassy Suites Hotel into the Ritz-Carlton Denver.
The market has quickly absorbed 900 new rooms that have come on line in the last year, and Benton said he expects the market will continue to strengthen.
Through the end of October, the downtown market had an occupancy rate of 71.6 percent, up from 70 percent last year.
Average room rates this year are $140.75, compared with $131.71 last year.
Staff writer Julie Dunn can be reached at 303-954-1592 or jdunn@denverpost.com.
Staff writer Margaret Jackson can be reached at 303-954-1473 or mjackson@denverpost.com.
