The upcoming AC Hotel in downtown Knoxville will feature a rooftop bar and stunning views.
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 has successfully obtained $39 million in construction financing for an exciting new addition to downtown Knoxville—the AC Hotel Knoxville Downtown. This modern 161-room hotel will be situated at the intersection of 427 Walnut St. and 416 Locust St., with an expected completion date set for winter 2026.
The financing secured is structured with a 75% loan-to-cost (LTC) ratio and is non-recourse, which means that it is secured only by the project itself, minimizing the liability for the borrower. The loan was extended to Vector Hospitality Inc., which is taking the lead on bringing this project to life.
The AC Hotel will stand out with its incredible rooftop bar and kitchen, providing stunning views of Neyland Stadium, which is home to the athletic teams of the University of Tennessee Volunteers. This feature promises to draw in both visitors and locals looking to enjoy a unique dining experience with a view.
Knoxville has been witnessing a significant growth in its hotel market, with an addition of 1,178 rooms across 13 new properties from 2015 to 2024. The city has seen its average nightly hotel room rate rise from $84.84 to $126.15 in the same time frame, reflecting the increasing demand for accommodations in the area.
Besides the AC Hotel, construction is also currently underway on another hotel—an eight-story Home 2 Suites by Hilton that will feature 130 rooms. This project is located in the 1100 block of Clinch Avenue, near the popular World’s Fair Park. The property for this hotel was purchased by Sachchidanand Hotel LLC for $1.1 million back in April 2021. The new Home 2 Suites is designed to include an outdoor patio and a rooftop lounge, adding essential amenities to cater to guests.
The firm ELEVATE Architecture Studio is responsible for designing the Home 2 Suites, while Memphis-based McMurry Construction is leading its construction. This ongoing development adds to the notable landscape of Knoxville’s hotel scene, which is diversifying with various types of accommodations tailored to modern travelers’ needs.
Knoxville is not slowing down when it comes to its hotel offerings. In addition to the AC Hotel and Home 2 Suites, there are numerous ongoing hotel projects in the area. Among them are a Moxy by Marriott and a Tempo by Hilton, both of which will also be operated by Vector Hospitality. This surge of new hotel developments is a clear sign of Knoxville’s vibrant tourism and business atmosphere, as more visitors come to enjoy the charm of this growing city.
As these projects come to fruition, the Knoxville hospitality market continues to evolve, bringing in a variety of options and amenities for both tourists and residents alike. The addition of modern facilities and diverse accommodations will help position Knoxville as an increasingly attractive destination for visitors from near and far.
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