By Christine Graf
Missouri-based Pinecone Holdings recently purchased the 73-room Best Western Plus at 3291 South Broadway in Saratoga Springs.
The $5.6 million purchase was finalized on Aug. 23 and financed through Catskill Hudson Bank.
Pinecone Holdings also owns Best Western Plus hotels in Bolivar, Mo., and Mascoutah, Ill. Their additional holdings include storage unit facilities, a shopping plaza, and a construction company.
According to Pinecone Holdings Managing Director Drew Kifer, the company’s search for a new hotel was extensive and spanned the entire east coast. He said they were looking for a property that had the potential to provide the best return on investment.
“We were looking at and wanting to stay with Best Western, which is a brand we know and understand,” said Kifer. “We narrowed it down to a few key properties, and we felt like the Saratoga Springs property had the bones we were looking for.
“It is a good property that is in good shape and one with a lot of potential. We think the Saratoga market will continue to grow. It’s such a strong leisure market for the greater New York area. There’s always something going on. Obviously there is racing season and that is where the hotel has its strongest point since the whole town sells out. But we think the opportunity for the hotel is to get a little more of its fair share in the off season. So that will be where putting more focus on sales is going to be of benefit to us.”
The Saratoga Springs Best Western Plus will be managed by WNW Hospitality Management of Woodbury, L.I. Kifer will not be involved in day-to-day operations, but will focus on strategic decision making and property upgrades.
“We will be making some changes that will improve guest satisfaction,” he said.
These changes include purchasing new mattresses, installing an outdoor fire pit, adding outdoor seating, and upgrading the property’s landscaping.
The hotel has also hired a new general manager, Cathy French. French reports directly to the management company and has extensive hotel management experience. Prior to being hired at the Best Western Plus, she was employed at the Holiday Inn in Saratoga Springs.
“We’re excited to start getting our hands dirty and start improving the hotel,” said Kifer. “We’re meeting with Best Western at the end of the month. They are going to fly some of their executives up there to evaluate some of the things we are looking at doing. After that we will decide the level of changes we will be making.”
Although the company has not yet set a budget for improvements, they plan on establishing a generous capital replacement reserve, he said.
“The industry average for capital replacement reserve is 4 percent,” said Kifer. “We have increased that to 4.5 percent. The rule of thumb is that every time you sell a room for $100, you keep $4 of that for rainy day fund or to replace things when they break. By increasing that to 4.5 percent, that gives us more of a budget to make improvements.”
Pinecone Holdings has no immediate plans to acquire additional properties in the Capital Region, but Kifer said they are always on the lookout for new properties to acquire.
“It really depends on what is on the market,” he said. “We are not looking for new build opportunities. We are looking for properties that meet our criteria of having good bones and good background. Places where we can find value above and beyond what the property is currently doing.”