News Summary
Cronheim Hotel Capital has secured $39 million in financing for the construction of the AC Hotel Knoxville Downtown, set to feature 161 rooms and a rooftop bar. Located at the intersection of Walnut St. and Locust St., the project emphasizes sustainability with a C-PACE component. Construction is expected to be completed by winter 2026. This development is part of a broader hotel boom in Knoxville, which has added over 1,100 rooms since 2015, reflecting the area’s growing demand for accommodations.
Cronheim Hotel Capital Secures $39 Million for New AC Hotel in Downtown Knoxville
Cronheim Hotel Capital has successfully obtained $39 million in construction financing for the new AC Hotel Knoxville Downtown, bringing exciting developments to the vibrant heart of Knoxville. The financing is tailored for a 161-room hotel set to rise at the intersection of 427 Walnut St. and 416 Locust St.
The recent loan agreement is classified as non-recourse and structured with a 75% loan-to-cost (LTC) ratio. It also includes a C-PACE component to support energy efficiency and sustainability during the construction phase. The borrower for this financing is Vector Hospitality Inc., indicating a strong commitment to enhancing Knoxville’s hospitality offerings.
Project Timeline and Amenities
The AC Hotel Knoxville Downtown is slated for completion in winter 2026. Once finished, guests can look forward to a rooftop bar and kitchen that will provide stunning views of Neyland Stadium, the renowned home of the University of Tennessee Volunteers. This feature is expected to add a unique element to the hotel’s appeal, making it a prime destination for both locals and visitors.
Ongoing Developments in Downtown Knoxville
In addition to the AC Hotel, downtown Knoxville is buzzing with other hotel projects. Currently, construction is in progress for an eight-story Home 2 Suites by Hilton, featuring 130 rooms. This property is located in the 1100 block of Clinch Avenue, a stone’s throw from World’s Fair Park. The land for the Home 2 Suites was purchased by Sachchidanand Hotel LLC for $1.1 million in April 2021.
The new Home 2 Suites hotel will offer modern amenities such as an outdoor patio and a rooftop lounge. The architectural design is being executed by ELEVATE Architecture Studio, while construction is spearheaded by McMurry Construction, a company based in Memphis. This collaborative effort indicates a commitment to quality and contemporary design in the city’s ever-expanding hotel market.
Knoxville’s Booming Hotel Sector
Knoxville has witnessed remarkable growth in its hotel sector, significantly enhancing its accommodation options. Since 2015, the city has added 1,178 hotel rooms across 13 new properties, reflecting a robust interest from developers and investors alike. Additionally, the average nightly hotel room rate has surged from $84.84 to $126.15 within the same period, highlighting the growing demand for lodging as more visitors are drawn to the area.
Moreover, Knoxville is diversifying its hotel offerings further, with multiple ongoing projects. In addition to the AC Hotel and Home 2 Suites, new developments include a Moxy by Marriott and a Tempo by Hilton, both also operated by Vector Hospitality. This diversification ensures that hotels are not only plentiful but also varied in terms of amenities and target markets.
Conclusion
The recent financing for the AC Hotel Knoxville Downtown represents a significant milestone in the ongoing transformation of downtown Knoxville. With numerous hotel projects underway and a steady rise in demand for accommodations, the city is poised for continued growth in the hospitality sector. The additions of unique amenities and modern design are sure to captivate visitors, further establishing Knoxville as a prime travel destination.
Deeper Dive: News & Info About This Topic
Additional Resources
- Rebusiness Online: Cronheim Hotel Capital Secures $39 Million for New AC Hotel in Downtown Knoxville
- Knox News: Knoxville Construction Near World’s Fair Park
- Inside of Knoxville: Downtown Development Updates January 2025
- Encyclopedia Britannica: Hotel Development
- Google Search: Knoxville Hotel Construction
