Quirk Hotel Charlottesville opened in March 2020, at the start of the pandemic. (Image courtesy CBRE)
After a four-year run that got off to a tough start with an untimely opening at the dawn of the pandemic, the Charlottesville version of Richmond’s Quirk Hotel has been sold to a New York buyer that plans to rebrand it later this year.
Quirk founders Katie and Ted Ukrop and an ownership group of about 30 investors sold the 80-room hotel in downtown Charlottesville to Blue Suede Hospitality Group, a 2-year-old firm based in New York City.
The four-story building near Charlottesville’s Downtown Mall sold Monday for $24 million, according to the city assessor’s office.
The Ukrops purchased the property for $3.75 million in 2017, a year after submitting plans for the hotel. A $12 million capital raise followed, Ted Ukrop said, including $5.3 million that was raised in 2018 and reported for Quirk Charlottesville in SEC filings.
Quirk Charlottesville opened in March 2020, right at the outset of the COVID-19 pandemic that initially devastated the hospitality industry. Both Quirks reopened after a three-month closure that prompted the Ukrops to reach out to investors for additional capital. An additional $500,000 for Quirk Charlottesville was raised that spring, SEC filings show.
Katie Ukrop cut the ribbon on Quirk Hotel Charlottesville in 2020 alongside husband Ted and hotel staff. (BizSense file)
It’s unclear whether those investments paid off in the end, or if the $24 million price for the property includes consideration for the Quirk Charlottesville business. Ted Ukrop declined to comment Wednesday beyond the contents of a transaction announcement distributed Tuesday.
“Not all ventures or pursuits go as planned and opening two weeks before COVID certainly presented many challenges,” Ukrop said in the release. “We intend to refocus our energy and efforts on our flagship Quirk Richmond location.”
The sale was announced by CBRE, which brokered the deal. Carter Gradwell of CBRE’s Richmond office represented Quirk Charlottesville LLC in the transaction.
Blue Suede Hospitality was represented by John Pritzlaff and Jenny Stoner of Thalhimer’s Charlottesville office.
Blue Suede, led by CEO Kenny Lipschutz, has a portfolio of four hotels – two in Miami and one each in Memphis, Tennessee, and Ann Arbor, Michigan.
It acquired the 79-room South Beach Plaza hotel and villas in Miami last year for $26.5 million, according to news reports. The South Beach Plaza property has since been rebranded.
In an email to BizSense, Lipschutz said a rebrand is likewise in store for Quirk Charlottesville this fall, when a third-party food-and-beverage vendor also will be announced. He said the hotel will continue to operate without interruption and will honor all existing and future reservations and events.
Kenny Lipschutz
“We are very excited to continue the great legacy of this remarkable hotel and further enhance its connection to downtown Charlottesville,” Lipschutz said. “We look forward to doing our small part to contribute to the dynamic and growing momentum downtown and are inspired by the opportunity to further support the unique and vibrant Charlottesville community.”
Blue Suede’s properties feature technologies such as digital locks and contactless check-ins, according to its website. Those systems will be installed over a period in which Retro Hospitality, Quirk’s Richmond-based consulting firm, will continue to manage Quirk Charlottesville, Retro’s Paul Cooper said.
“We’re maintaining full operations as they’ve always existed and then transitioning the property once they have their operating systems installed,” Cooper said Wednesday. He described Blue Suede’s business model as “less labor-reliant” and “more technology-driven.”
While the hotel will be renamed, Katie Ukrop plans to keep her Quirk Gallery open at the hotel at 499 W. Main St., according to the CBRE announcement that included comments from Ted Ukrop. A similar art gallery is located at Quirk Richmond.
“Katie and I want to thank our guests, artists, and investors for supporting Quirk Charlottesville over the past four years. We are especially grateful to our wonderful team for their hard work and dedication,” Ted Ukrop said in the release.
The four-story hotel features a rooftop deck like its Richmond predecessor. (Image courtesy CBRE)
Cooper, whose Retro Hospitality took over management of Quirk Charlottesville after two years under Hyatt Hotels, attributed the decision to sell to a hospitality market that remained challenging in Charlottesville years after the pandemic’s arrival.
Where Quirk Richmond has been performing well, Cooper said, “The market in Charlottesville, from an overall performance of the competitive hotels, has taken a fairly significant dip since COVID. We’ve had some new supply that’s come on the market, and most of the business in Charlottesville has been reliant upon UVA-driven events and travel, and it hasn’t really come back since COVID.
“Ultimately it’s 31 different investor groups that had an interest in selling at this point,” Cooper said, noting that Richmond’s ownership group is considerably smaller. “We’re four years in, and typically hotels stabilize after three full operating years.”
Discounting the first two years at COVID’s peak, Cooper said, “You essentially have a hotel that’s been functioning for two years. But at the end of the day, it’s a real estate decision. Investors, owners buy real estate and they sell it, and it was their decision at this point in time to sell the properties.”
Cooper said the sale will have no impact on operations or ownership of Quirk Richmond, which he said has maintained 76% occupancy so far this year. He said the Charlottesville hotel, which employs 91 workers, maintained an occupancy that was “average of market performance.” The Richmond Quirk employs 85 workers.
“We’re on a very strong track of 2023 and 2024 performance, so there’s no impact to the guest stay, to staffing, to ownership structure or to management by Retro Hospitality of Quirk Richmond,” Cooper said.
While Quirk Charlottesville was seen as the first of potentially more Quirks to come, Cooper said there are no discussions to expand the brand.
“The focus is on Richmond,” he said.
Note: This story has been updated with additional capital raise and broker details provided after publication.
“The Focus is on Richmond”
That’s good. And I have heard that from other businesses that do business in Richmond and somewhere else in Virginia.
Two interesting outfits, Quirk of course, but also look at this NYC based on — that is a pretty geographically disparate portfolio for such a small one!
This is hotel has a stunning design and terrific rooftop. Congrats to the Ukrops with their sale. I hope they continue to build beautiful properties.