California-based investors have purchased the 3 Palms Hotel in Scottsdale for a price of approximately $23,000,000. Located at 7707 E. McDowell Rd, the property is situated near Old Town Scottsdale and the growing city of Tempe.
“This was one of the most challenging transactions of my career,” says James Meng, senior vice president with Colliers in Arizona. “We had to merge two 1031 exchanges into the purchase of this hotel. Multiple buyers and sellers were involved, as well as complex business elements. The buyer needed to successfully close a transaction in San Diego approximately within 30 days of this purchase. The first transaction suffered from a few significant issues that could have collapsed this purchase. This was a balancing act from start to finish. The power of the Colliers brand flexed its abilities to the maximimum, involving financing to both purchases and brokering the investment sale of this hotel.”
Peter Sun, manager at Five Star Inn One LLC, and Lily Hsue, manager at Five Star Inn Two LLC, of San Diego, CA purchased the 3 Palms Hotel. The seller was Roger Abbott of La Jolla, CA.. Meng handled the negotiatoins and transaction.
The 3 Palms Hotel was originally constructed in 1980 and remodeled in 2006-2007. Located on 3.44 acres, the property offers 130 guestrooms. Guestrooms include full length mirrors, complimentary newspapers, high speed Wifi and deluxe spas. The property features a large outdoor pool and spa, a rooftop sundeck, Fitness center and concierge.
The hotel’s location within an opportunity zone made it exceptionally appealing for a 1031 exchange. Scottsdale’s entertainment district boasts Arizona’s highest revenue market for hotels. The area is nationally recognized for its special events, such as Barrett Jackson Auto Auctions, Waste Management Phoenix Open and MLB spring training. The 3 Palms Hotel offers easy access to Loop 101, Loop 202 and Interstate 10.
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