VOL. 122 | NO. 142 | Tuesday, July 31, 2007
Real Estate & Development
California-Based Investor Brings Two Hotels to Airport Area
By Eric Smith
Yet another out-of-town real estate investor is pumping money into the local economy, further proof that Memphis remains attractive to outside interests.
This time it's Newport Beach, Calif.-based Chase Merritt LP, which is launching a pair of nationally branded hotels called Value Place on both sides of Memphis International Airport, according to The Daily News Online, www.memphisdailynews.com.
"When we were originally working with the franchiser, we wanted to get into areas where we could have a larger presence than just building one," said Chase Merritt's senior vice president Hugh Kerr. "Memphis happened to be an area that had that. Memphis has good growth. It's not going to go away. People are moving here because of cost of living and the cost to do business here. We thought it would be a benefit for us to get involved here."
Activity lures beds
Operating locally as Chase Merritt Residence LLC, the company last week broke ground on the $3.3 million Value Place hotel at 3913 Lamar Avenue/U.S. 78, near Getwell Road and just east of the airport.
And on June 18 the company filed another $3.3 million building permit for a second Value Place hotel, this one at 1218 Winchester Road at the corner of Elvis Presley Boulevard and just west of the airport.
The latter property is a 1.6-acre vacant parcel up the road from Elvis Presley's mansion, Graceland. The area draws thousands of visitors each year, many of whom stay in neighborhood hotels.
But being close to the King's digs wasn't the primary reason Chase Merritt chose the corner - it is strategic for its proximity to the many nearby companies.
"The Winchester property is a great property because of Graceland, but also because there's a lot of industry back away from the road that people don't see," Kerr said. "These places bring people in for training, and they need a place to stay for a few weeks."
As for the Lamar and Getwell location, Kerr said he likes the vibrancy along the busy corridor.
"There's a good amount of traffic that runs on 78, even though it's not a major interstate like Interstate 40," Kerr said. "If you've ever driven down Lamar Avenue between 8 and 10 in the morning or between 4 and 6 in the afternoon, it's pretty much a traffic jam through there. So there's a lot of activity."
Finding value in this place
Both hotels will be four-story, 121-room extended-stay properties. Value Place is a Wichita, Kan.-based chain launched by Jack DeBoer, the hotelier who created Residence Inn, Summerfield Suites and Candlewood Suites before selling those brands.
The hotels will be the third and fourth Value Place franchises in the Memphis area, although Chase Merritt is not associated with either of the existing properties, which are at 5787 Shelby Oaks Drive, near I-40 and Sycamore View Road, and 7060 Riverdale Bend Road at Tenn. 385 and Riverdale Road.
The company does plan to open two additional Value Place hotels and is eyeing sites in Horn Lake and Downtown, although nothing is definite, Kerr said.
General contractor for the two hotels is Little Rock-based MDH Builders Inc., which built the first Value Place in Memphis, on Riverdale Road, and also built Chase Merritt's two Value Place hotels in Augusta, Ga.
Value Place hotels have an interior corridor layout with three floor plans for its rooms: studio (one bed), studio double (two beds) and studio sleeper (one bed and one pullout couch). All rooms have kitchens.
"The model behind Value Place is keep it clean, keep it simple and keep it safe," Kerr said. "It's very important to us that the people are staying there have no reservation about staying there two or three weeks while doing a job for FedEx or doing a big construction project or even people just relocating to the area and can't move into their house yet."
Chase Merritt is a privately owned real estate investment firm with acquisitions during the past three years totaling more than $700 million, according to its Web site. The company operates the two hotels in Georgia and is planning to build four in Chicago, four in Milwaukee and two in southern California, in addition to the two in Memphis.
Kerr lauded Chase Merritt's partnership with Value Place because of the hotel's emphasis on quality and consistency whenever a new property is built.
"The franchiser is very strict on the brand, which we like, so the hotels are going to look the same, they're going to smell the same, the check-in process will be the same," Kerr said. "No matter where you go - if you check into one in Memphis or you check into one in Georgia - you'll have the same feel of a Value Place. You'll know where you're at."
Community with promise
Terris Harris, a Whitehaven developer and owner of D.A.S.K. LLC, said he is thrilled with the arrival of another outside investor to the community, which essentially is following the rejuvenation that Elvis Presley Enterprises has provided with hotels, shops and restaurants.
"It's just more confirmation that the area is viable, especially with the owners of Elvis Presley Enterprises pledging to come in and do some really big investments with Graceland," Harris said. "It also signifies that it's a stable community that has the potential to be profitable."
And the principals of Chase Merritt are excited about being here too, said Kerr, who has flown to Memphis about 15 times to get the hotels going. He said they plan on being more than just a property owner with an out-of-town address - they're here for the long haul.
"Even though we're based out of California, we're not an organization here to just build these things," Kerr said. "We're here to be part of the city and part of the community."