When Grand Ventures Hotel bought the Red Lion in Portland, Oregon’s Lloyd District in 2013, the development team saw something brewing on the east side of the Willamette River. Everything west of the river, in downtown proper, was already well developed, making the east side the next logical place for growth within the Portland city boundaries. Thanks to the foresight of partners Alan Battersby, Craig Schafer, Desmond Mollendor, and Lars Pedersen, Grand Ventures got in the market early, before a wave of reinvestment.
Located across from the Oregon Convention Center, the property—which is now named Hotel Eastlund—has since become a centerpiece of the fast-developing Lloyd District. “This whole area is blowing up,” says Mollendor, the hotel’s GM. (See “Urban Renewal, page 43.”) But their 1960s-era hotel wouldn’t have been able to keep pace with the changing neighborhood and attract a higher-end customer without undergoing a major renovation and repositioning project. And like so many other savvy developers across the country, Grand Ventures focused on approachable restaurants and lobbies, relevant designs, and community-centric experiences to transform its urban property into a sought-after destination that appeals to both travelers and locals.
In the fall of 2014, the company embarked on a $15 million, gut-remodel project to incorporate contemporary architecture, state-of-the art technology, and luxury amenities. “The prior owners really never put any extensive capital into the hotel—they put a shoestring fix here and there. The hotel had a lot of deferred maintenance,” Mollendor says. In June 2015, the property relaunched as Hotel Eastlund, a 168-room luxury boutique hotel targeting business travelers, leisure guests, and convention attendees. Rooms started at $189, well above the $90 average rate that Red Lion, a midscale brand, was able to command.
One of the major challenges Grand Ventures faced was making the car-centric hotel more compatible with foot traffic. “Portland is a very pedestrian and bike friendly town,” Mollendor explains. “We really try to deemphasize vehicle traffic and promote pedestrian and public transportation, which is unbelievable here.” To bring the property into the 21st century, Hotel Ventures reduced the number of vehicle entry/exit points to the underground parking garage and created multiple pedestrian entrances around the hotel. This helps draw local business to Portland chef and restaurateur David Machado’s two new restaurants at the hotel. His rooftop Altabira City Tavern pairs American cuisine with local craft beers, Pacific Northwest wines, and locally distilled spirits.
By reorienting the hotel’s layout, Grand Ventures also was able to expand the size of the lobby, where Chef Machado has a bakery/café/wine bar called Citizen Baker. “We wanted to make it as comfortable as possible for Portland locals. We want them to feel like they are welcome at the property and can enjoy the facilities, whether they’re in the lobby café bakery or the sixth-floor rooftop restaurant and patio,” Mollendor says.
The team behind Hotel Eastlund had orchestrated a similar turnaround in the city only a few years prior, of the rundown Portland City Center Days Inn. Posh Ventures, an affiliate of Grand Ventures, acquired the hotel for $13.5 million in 2007, and reopened it as the upscale Hotel Modera in 2008 after a $13 million renovation. In 2013, Pebblebrook Hotel Trust purchased the hotel for $47.5 million. The team has collectively acquired and repositioned 11 hotels over the last 26 years. “We typically take distressed assets that are underperforming and need to be revamped and infuse some capital into the properties to get them current and operational,” Mollendor says.