Crowne Plaza Milwaukee West
in Wauwatosa will transition to a new flag and management company this fall.
Newton, Maryland-based Sonesta International Hotel Corporation
plans to rebrand the 198-room hotel, located at 10499 Innovation Drive, to Sonesta Milwaukee West and assume operations beginning Dec. 1, according to the company's website
Sonesta is a brand affiliate of Service Property Trust
(Nasdaq: SVC), which purchased
the hotel in May 2019 for $30 million. The Newton-based real estate investment trust owns 329 hotel properties operated under management or lease agreements with brands such as Hyatt, Radisson and InterContinental Hotels Group, which is the parent company of the Crowne Plaza flag.
Crowne Plaza Milwaukee West is one of 103 hotel properties SVC is transferring from IHG to Sonesta after IHG failed to pay SVC’s minimum returns and rents due for July and August 2020, totaling $26.4 million, according to an August news release
. Management agreements with IHG are set to be terminated Nov. 30.
"Based on historical experience, we believe the current portfolio of 103 hotels may perform as well, or better, as Sonesta hotels post-conversion and once stabilized in their respective markets," said John Murray, president and chief executive officer of SVC in a statement.
IHG Management recently filed a Worker Adjustment and Retraining Notification (WARN) Notice with the Wisconsin Department of Workforce Development that approximately 31 employees at the Wauwatosa hotel will be "permanently separated."
According to the WARN notice
, the employment separations are due to "unforeseen business circumstances" resulting from SVC's intent to terminate the hotel's management agreement with IHG as well as the economic downturn brought on by the ongoing COVID-19 pandemic.
However, IHG Management said it believes the hotel's new operator "intends to offer employment to substantially all employees."
Representatives of neither Crowne Plaza Milwaukee West nor Sonesta were able to provide comment by press time.
Sonesta Milwaukee West will be the brand's first Wisconsin flag. The eight-story hotel opened in 2008
. The building sits on a roughly 7.5-acre site, and has an assessed fair market value of nearly $22.9 million, according to county records.
Thanks to SVC's pending transfers of 103 IHG hotel-- in addition to 98 Marriott hotels
for similar reasons-- Sonesta is poised for a 350% increase in its national portfolio by the end of the first quarter next year, according to a news release
. Currently, Sonesta operates 80 hotel properties across the U.S. and six other countries.