Joint Venture Equity Request · Downtown Phoenix, AZ
The Ellis
Hotel Conversion
Hotel Conversion
135 N 2nd Avenue · Phoenix, AZ 85003
$6.9M
LP Equity Request
100
Keys
2.27×
LP Multiple
23.8%
LP IRR
Tribute
Marriott Portfolio
| Source | Funded | Drawn | Amount | % Total | Per SF |
|---|---|---|---|---|---|
| Senior Debt | $— | $8,500,000 | $8,500,000 | 62.9% | $133 |
| Equity — GP | $100,000 | $1,700,000 | $1,800,000 | 13.3% | $28 |
| Equity — LP | $— | $3,212,000 | $3,212,000 | 23.8% | $50 |
| Total Sources | $100,000 | $13,412,000 | $13,512,000 | 100.0% | $212 |
| Use | Funded | Remaining | Amount | % Total | Per SF |
|---|---|---|---|---|---|
| Building Purchase | $— | $10,300,000 | $10,300,000 | 76.2% | $162 |
| Closing Costs | $— | $500,000 | $500,000 | 3.7% | $8 |
| Total Building | $— | $10,800,000 | $10,800,000 | 79.9% | $170 |
| Total Soft Costs | $— | $1,712,000 | $1,712,000 | 12.7% | $27 |
| Total Reserves | $— | $1,000,000 | $1,000,000 | 7.4% | $16 |
| Total Uses | $— | $13,512,000 | $13,512,000 | 100.0% | $212 |
| Soft Cost Item | Amount | % Total | Per SF |
|---|---|---|---|
| Architect / Structural / MEP | $600,000 | 4.4% | $9 |
| Civil | $65,000 | 0.5% | $1 |
| Interior Design | $325,000 | 2.4% | $5 |
| Technology Designer | $65,000 | 0.5% | $1 |
| Brand Consultant | $175,000 | 1.3% | $3 |
| Franchise Fee | $75,000 | 0.6% | $1 |
| Title | $25,000 | 0.2% | $0 |
| Appraisal | $12,000 | 0.1% | $0 |
| Environmental | $5,000 | 0.0% | $0 |
| Survey | $5,000 | 0.0% | $0 |
| Legal | $35,000 | 0.3% | $1 |
| Miscellaneous | $175,000 | 1.3% | $3 |
| Management | $150,000 | 1.1% | $2 |
| Total Soft Costs | $1,712,000 | 12.7% | $27 |
| Reserves | Amount | % Total | Per SF |
|---|---|---|---|
| Property Tax & Insurance | $200,000 | 1.5% | $3 |
| Interest Reserve | $800,000 | 5.9% | $13 |
| Total Reserves | $1,000,000 | 7.4% | $16 |
MPC Phoenix I, LLC seeks Limited Partner investors in a Joint Venture for the acquisition and conversion of the 100-key Ellis Hotel, a Marriott Tribute Portfolio flag. LP equity sought: $6,900,000. Sponsor committed: $1,800,000. Total equity: $8,700,000.
The JV will acquire a Downtown Phoenix office building and convert it into a Marriott-branded lifestyle hotel, owned fee simple and professionally managed by Aperture Hotels.
| Hotel Flag | Marriott Tribute Portfolio |
| Address | 135 N 2nd Ave, Phoenix AZ |
| Guestrooms | 100 Keys |
| LP Equity Request | $6,900,000 |
| GP Equity Committed | $1,800,000 |
| Total Equity | $8,700,000 |
| Total Capitalization | $34,800,000 |
| Exit Hold Period | 4 Years |
| Construction Timeline | 18 Months |
| Projected Opening | Q4 2027 |
| Preferred Return | 10% Annual |
| Distribution Structure | Pari Passu |
4-year hold before sale. Comparable Upscale+ hotels have recently traded at ~low 6% cap rates and well over $500,000 per key.
Historic office building acquired at $160 per square foot — well below replacement cost — and converted into a 100-key Upper Upscale Marriott lifestyle hotel. One of the only true lifestyle hotels in the Phoenix CBD.
White-box shell building is easily convertible. Construction is expected to take just 18 months, compared to 24+ months for new construction — accelerating time to revenue.
The Phoenix Central/CBD area is not expected to see major hotel supply increases. The Atari Hotel and Fairmont projects are unlikely to materialize. Ellis will be one of the only hotels to open in 2027/2028.
Kellwood acquiring 225,000 SF adjacent building for corporate HQ (600+ employees). Plus $500M+ PHX Sky Harbor expansion, Phoenix Convention Center expansion, and major ASU Downtown Campus growth.
| Sources | Amount | % Total | Per Key |
|---|---|---|---|
| Senior Debt | $26,100,000 | 75.0% | $261,000 |
| LP Equity | $6,900,000 | 19.8% | $69,000 |
| GP Equity | $1,800,000 | 5.2% | $18,000 |
| Total Sources | $34,800,000 | 100.0% | $348,000 |
| Uses | Amount | % Total | Per Key |
|---|---|---|---|
| Building Purchase | $10,450,000 | 30.0% | $104,500 |
| Hard Costs | $14,660,109 | 42.1% | $146,601 |
| FF&E | $3,296,000 | 9.5% | $32,960 |
| Soft Costs | $1,591,000 | 4.6% | $15,910 |
| Pre-opening | $275,000 | 0.8% | $2,750 |
| RE Tax Reserve | $150,000 | 0.4% | $1,500 |
| Working Capital | $250,000 | 0.7% | $2,500 |
| Interest Reserve | $3,000,000 | 8.6% | $30,000 |
| Financing Fees | $783,000 | 2.3% | $7,830 |
| Closing & Misc. | $344,891 | 1.0% | $3,449 |
| Total Uses | $34,800,000 | 100.0% | $348,000 |
| Year | LP Distribution | Notes |
|---|---|---|
| Year 0 | ($6,900,000) | Initial Investment |
| Year 3 | $437,228 | Partial Pref |
| Year 4 | $15,668,474 | Sale + Distributions |
| Total LP Return | $16,105,702 |
| Tier | GP | LP |
|---|---|---|
| Until 10% IRR | 20% | 80% |
| Above 10% IRR | 40% | 60% |
| Perm Refi | Sale | |
|---|---|---|
| Cap Rate | 8.00% | 7.50% |
| Transaction Costs | 1.00% | 1.50% |
| Gross Value | $38,571,429 | $45,742,580 |
| Value Per Key | $385,714 | $457,426 |
| Net to Sponsor | $45,056,441 | |
| 12 Month Period Ending | Jul-28 (Yr 1) | Jul-29 (Yr 2) | Jul-30 (Yr 3) | Jul-31 (Yr 4) | Jul-32 (Yr 5) |
|---|---|---|---|---|---|
| Occupancy | 62.4% | 77.8% | 80.6% | 82.6% | 82.6% |
| ADR | $221.03 | $228.03 | $228.84 | $239.95 | $247.15 |
| RevPAR | $137.92 | $177.41 | $184.45 | $198.20 | $204.15 |
| Revenue | |||||
| Rooms Revenue | $5,034,179 | $6,475,283 | $6,732,244 | $7,234,253 | $7,451,325 |
| Food & Beverage | $1,663,559 | $2,136,340 | $2,279,623 | $2,406,276 | $2,478,464 |
| Other Operated Depts | $404,274 | $555,161 | $603,899 | $649,828 | $669,323 |
| Miscellaneous Income | $45,552 | $58,214 | $61,780 | $64,820 | $66,765 |
| Total Revenue | $7,147,564 | $9,224,998 | $9,677,546 | $10,355,176 | $10,665,877 |
| Expenses & NOI | |||||
| Total Departmental Expenses | $2,616,316 | $3,254,939 | $3,457,383 | $3,656,896 | $3,766,603 |
| Total Undistributed Expenses | $1,459,813 | $1,889,812 | $1,986,733 | $2,119,907 | $2,183,512 |
| Management Fee (3.0%) | $214,427 | $276,750 | $290,326 | $310,655 | $319,976 |
| Total Fixed Charges | $381,476 | $502,800 | $617,150 | $750,836 | $773,363 |
| Net Operating Income | $2,475,533 | $3,300,697 | $3,325,953 | $3,516,882 | $3,622,422 |
| NOI Margin | 34.6% | 35.8% | 34.4% | 34.0% | 34.0% |
| Yield on Cost | 7.1% | 9.5% | 9.6% | 10.1% | 10.4% |
The Ellis Hotel is positioned near Interstate 10 in Downtown Phoenix, near Margaret T. Hance Park — with easy access to local dining, retail, and essential services. Freeway connections link the site to Scottsdale and Tempe.
The property lies within a steadily expanding submarket characterized by strong tourism, corporate demand, and sustained interest in select-service accommodations — serving business and leisure travelers near major employers and Phoenix Sky Harbor Airport.
| Hotel | Built/Renovated | Keys | Chain Scale | Comp Set | Occupancy | ADR | RevPAR |
|---|---|---|---|---|---|---|---|
| The Ellis Hotel — Tribute | — | 100 | Upscale — Tribute | — | — | — | — |
| AC Hotel Phoenix Downtown | 2021 | 199 | Upscale — Marriott | T3 | 73.6% | $234.58 | $172.67 |
| Westin Phoenix Downtown | 2008 | 242 | Upper Upscale — Marriott | T12 | 72.1% | $226.13 | $163.04 |
| Found Re Phoenix | 1974/2016 | 104 | Upscale — Independent | CBD PHX | — | — | — |
| Kimpton Hotel Palomar Phoenix | 2012/2025 | 242 | Upper Upscale — IHG | T12 | 69.0% | $209.14 | $144.34 |
| Comp Set Average (T12) | 72.1% | $226.13 | $163.04 | ||||
| Hotel | Keys | Sale Price | Price / Key | Cap Rate | Year Sold | Status |
|---|---|---|---|---|---|---|
| The Ellis Hotel — Tribute (Subject) | 100 | — | — | — | — | — |
| AC Marriott Biltmore | 160 | $67,800,000 | $423,750 | 6.5% | 2023 | New |
| The Camby Autograph | 277 | $110,000,000 | $397,112 | 7.5% | 2023 | PIP |
| Canopy by Hilton | 177 | $101,800,000 | $575,141 | 6.7% | 2023 | New |
| Home2 Suites Downtown | 148 | $43,300,000 | $292,568 | 0.0% | 2024 | New |
| Average (excl. subject) | $422,143 | ~6.9% | 2023–2024 | |||
Award-winning hotel management company specializing in compact full-service, extended-stay, and lifestyle properties. Manages a diverse portfolio across urban, suburban, and leisure markets including Marriott, Hilton, IHG, and Hyatt. Headquartered in Atlanta, operating nationally from Florida to California.
Drives consistent, risk-adjusted returns through its proprietary Balanced Scorecard approach — anchored in transparency, advanced analytics, and rigorous reporting.
National leader in turn-key real estate development with extensive hospitality expertise. Specializes in upscale and mid-scale projects for Hilton, Marriott, and Hyatt. Managing Principals Steve Laski and Gary Womack bring over 50 years of combined experience.
Provides comprehensive development services from initial market analysis through construction oversight and project turnover — ensuring seamless execution.
Finance & development arm of the Sponsor group. The combined Sponsor team has financed, owned, developed, converted, and operated multiple hotels across the United States — from ground-up large-scale hotels to boutique resort properties.
The group has extensive adaptive reuse experience, navigating complex City, State and Federal entitlement processes, and acquiring property tax credits through historical building preservation programs.