Seeking an investment opportunity closer to home, Par and Bal Gosal of the Kishan Group, operator of several Best Western motels in Alaska, purchased the Super 8 Meadow Wood Courtyard at 5851 S. Virginia St.
The brothers have lived in northern Nevada for nearly two decades, and "wanted to get something local and loved the location of the motel," Par Gosal said.
The Kishan Group is renovating the 154-room property, adding tile, granite counters and fresh paint through an in-house maintenance crew. Gosal says the project should take about a year to complete. The
Kishan Group also is adding a third location of Thai restaurant Bangkok Cuisine, which should open in April.
The transaction for the motel was completed in mid-December and involved a good deal of creativity from the buyer and seller, Great Western Hospitality, said broker Len Ramos, first vice president of the multi-housing group for CB Richard Ellis.
Ramos says that the property was never formally listed, but the previous owner had expressed interest in selling during the past few years. But with the freeze on commercial credit, getting a deal done proved to be much tougher than expected. Ramos thought he had a deal for the property lined up about a year ago, but it fell through due to financing.
"The capital markets were very, very difficult to deal with," Ramos says. "They had pretty much determined they were not going to make any loans in hotels unless the buyer would come up with 50 percent or so equity, and for these people that didn't work. It was very challenging in that respect."
Ramos says the deal that ultimately came together required the seller to carry a large amount of the purchase price and required the buyer to put up cash for renovation.
"Instead of using money for equity they used a good part of money for targeted renovation of the property," Ramos said.
Ramos notes that the sale of the motel, built in 1965, might become typical for real estate transactions during this recession.
"When you have a willing buyer and seller, there is a way to make it happen in spite of all issues in front of you. It is very difficult today to sell a motel property," he says. "Lenders are not excited about lending on motels because of the volatile economy; motels have suffered a lot of vacancy compared to recent history. But if buyer and seller are not stuck on conventional ways of doing a deal, they can make it happen."
