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 secured $39 million in construction financing to build a new hotel in downtown Knoxville. This much-anticipated project, the AC Hotel Knoxville Downtown, will feature 161 rooms and is strategically located at the intersection of 427 Walnut St. and 416 Locust St.
The financing is characterized as non-recourse, and it boasts a robust 75% loan-to-cost (LTC) ratio. Additionally, it incorporates a Commercial Property Assessed Clean Energy (C-PACE) component, emphasizing the commitment to sustainable building practices.
The borrower for this substantial loan is Vector Hospitality Inc., which is also behind several other hotel developments in the area. The construction of the AC Hotel is projected to reach completion in winter 2026.
Features and Amenities
The AC Hotel Knoxville Downtown will not only provide accommodation but will also feature a rooftop bar and kitchen, offering breathtaking views of Neyland Stadium, the home of the University of Tennessee Volunteers. This feature is expected to attract both locals and visitors looking for a lively atmosphere coupled with striking scenery.
Concurrent Developments in Knoxville
In addition to the AC Hotel, there is an ongoing construction project for another hotel in downtown Knoxville. An eight-story Home 2 Suites by Hilton is underway and will consist of 130 rooms. This project is situated in the 1100 block of Clinch Avenue, conveniently close to the popular World’s Fair Park. The property was acquired by Sachchidanand Hotel LLC for $1.1 million in April 2021.
The upcoming Home 2 Suites will enhance the urban landscape with perks such as an outdoor patio and a rooftop lounge, creating a multifaceted experience for guests. The design of this property is being overseen by ELEVATE Architecture Studio, while construction is being managed by Memphis-based McMurry Construction.
Knoxville’s Booming Hotel Market
Knoxville is experiencing a significant boom in hotel development, having added 1,178 rooms with the establishment of 13 new properties between 2015 and 2024. This impressive growth has seen the average nightly hotel room rate soar from $84.84 to $126.15 over the same period, reflecting the increasing demand for accommodations in the region.
Several other hotel projects are also in progress, including a Moxy by Marriott and a Tempo by Hilton, both led by Vector Hospitality. This influx of new hotels indicates a diversification in Knoxville’s hotel market, catering to a wide array of preferences and budgets.
Conclusion
The development of the AC Hotel and Home 2 Suites in downtown Knoxville is just a part of the larger trend of hotel growth in the area. With new amenities and options emerging throughout the city, visitors will soon have even more choices during their stay, enhancing the overall experience of what Knoxville has to offer.
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
