100 Civic Center Dr - Land under Holiday Inn Civic Center

In 1952, over 71 years ago, two brothers named Brown, from a pioneer family in Charleston, set up a trust for future generations.. They first acquired a piece of ground along the north side of Virginia Street at the Elk River bridge and comprising most of the block of Virginia, Reynolds, and Quarrier Streets. The city owned the balance of the land. There were some old buildings on it at the time which remained until 1973 when the buildings were demolished and a Holiday Inn was built on the property under the terms of a 100 year land lease. The lease was for 30 years with seven 10-year options. The brothers had five children between them, and now there are 11 heirs to the property. Before another generation comes along, they have decided to sell. What is for sale is the lease agreement between the current Holiday Inn Express franchise operator and the Brown trust. It has about 50 years left to run before it terminates. At the termination, the land reverts to the landowner. The building will be a 100 years old, and it is questionable whether it would have any value. The land will still be in downtown Charleston, however. Oh, if we could just predict the future 50 years hence... At a later date, the original developer of the Holiday Inn hotel sold it to a franchisee that operates out of Pennsylvania. They own numerous hotels. The lease has been transferred to them as Lessee. The lease pays a minimum rent of $5000 per month all year long, representing the base amount. In March of each subsequent year, a bonus check is mailed to the owner and it represents 5% of the difference between the gross income that the hotel made and a base amount. It does have a ceiling and the present ceiling is $60,000. That amount was paid to the owner of the property in March, 2023 for the fiscal year 2022. The income has been consistently into the overage and almost to the max on every occasion except for 2021 and 2020 where the covid virus had negative effect on hotels and bookings and ultimately gross income. It has bounced back from that and the level of confidence for the hotel franchise operator is at an all-time high, as they just spent several million dollars renovating all 196 rooms in the hotel in addition to all of the common areas, the conference rooms, and the support areas. Additionally, they did a complete makeover of the exterior of the hotel. It literally looks brand-new. They plan on being around for a long time. Charleston West Virginia is acknowledged to be a very good Level 3 convention center. This is because we have a stunning convention center/Coliseum and the appropriate amount of hotel rooms to accommodate groups of over 10,000. In the summertime, when most conventions occur, there is plenty to do here, especially in the visual and performing arts. West Virginia is "America's Playground." The subject property is poised immediately across the street from the new Civic Center/Coliseum, whose renovation recently cost in excess of $100 million. It is a stunning tour de force and attraction for Charleston as a convention center. The location of the subject is second to none. It has excellent access, abundant parking, walking distance to all of the major attractions in Charleston, and it is just been totally gone over. There is every reason that this Holiday Inn Express will last the full length of term in the lease, because it has been so well taken care of. The risk on this deal is that some kind of emergency or economic downturn will cause the volume in this hotel to go down, therefore reducing the overage rent paid in March of each year. What is excellent in Charleston is the symbiotic relationship between the mayoral administration and the people in the hospitality industry. It is at an all-time high and each knows that it depends on the other. Charleston will continue to be a level 3 convention center. There will always be concerts and athletic events at the Coliseum. The subject is poised very well to keep the same amount of business it has been doing for the foreseeable future. However, income could be impacted by the volume decrease. The good side of the equation is that there is every likelihood that the $120,000 per year on a triple net basis which is currently being paid to the owner by the lessee will continue throughout the term of the lease subject to minor increases as the options are picked up. In other words, it is not flat throughout the remainder of the term of the lease. All of the financials and all of the legal documents are available for review to qualified parties. Please contact me for any information you may wish and to register as a prospect. Jonathan Cavendish