Bridge Partners acquired the 250 key Radisson Penn Harris Hotel located in Harrisburg, Pennsylvania in 1996 when the property was pending foreclosure and facing cancellation of its franchise contract. The Bridge Partners investment partnership – backed by one of its institutional equity investors – acquired the asset all cash for $7 million.
At closing, the classic colonial building suffered both material deferred maintenance and outdated functionality, driving poor operating performance at the asset. The investment thesis was to provide needed capital to correct physical deficiencies and to add the amenities and functionality required to make the asset competitive in the full service/group segment of the hospitality sector.
Bridge Partners engaged an expert hospitality management company to manage day to day operations of the asset and to oversee the major capital improvement program. The investment partnership spent an initial $3M to upgrade common areas, guest rooms and back of the house facilities, including kitchens and building systems. The capital project also included adding new uses – laundry facilities, business center, exercise facilities and expanded meeting space- to drive group and business traveler demand to the property. Since completion of the project, the renovated and repositioned product has been successful year over year in drawing large regional meetings and groups, typically booking dates 2 to 3 years in the future.
The improved performance of the property allowed Bridge Partners to fund a full return of invested capital in year six of the investment through a cash-out refinance. Additionally, Bridge Partners executed a buyout of the institutional partner co-terminus with placing the long term financing. In the years since and with the intent of holding long-term, Bridge Partners has continued to reinvest in the asset to maintain its competiveness and to deliver continued returns to the remaining investors.