Lincoln Hotels of Dallas has purchased a 10 percent interest in the Embassy Row Hotel at 2015 Massachusetts Ave. NW and will take over management of the 203-room hotel.

Lincoln Hotels, a two-year-old subsidiary of Lincoln Properties, the nation's third largest commercial builder, is headed by Joseph W. McCarthy, former president of Silver Spring-based Quality Inns.

McCarthy said Lincoln plans to spend $3 million to refurbish the decade-old Embassy Row and will upgrade the hotel to compete with the Madison, the Fairfax, the Four Seasons, and other Washington hotels in the $100-a-night class.

The Embassy Row already caters to the upper end of the travel market, but McCarthy acknowledged its occupancy rate has slipped in recent years. He blamed the decline on what he called "an imbalance in the perception of the hotel in that price range. There's no reason why it should not be a five-star location," he added.

The Embassy Row will be completely redecorated and refurnished and may be renamed, McCarthy added.

The Embassy Row will become the fourth operating property of Lincoln Hotels, which has two more hotels under construction and five more in earlier stages of development.

McCarthy left Quality Inns two years ago and along with former QI marketing chief Robert D. McGrail has started building what Lincoln Properties envisions will become a 20-to-30-hotel chain. The Lincoln hotels range from a mirror wrapped tower planned for a Lincoln Properties office complex in Dallas to a 110-year-old cast iron building being renovated in Little Rock.

In two years, McCarthy said, Lincoln Hotels has invested $125 million and has budgeted another $250 million for the properties on the drawing board. A high-rise hotel near Baltimore's Inner Harbor is planned as a joint venture with McCormick Properties, the real estate division of the Baltimore spice maker.

Unlike many chains which want to manage hotels but not own the real estate, Lincoln's strategy is to both invest in and run its properties, McCarthy added.

Lincoln is a partner in the Embassy Row with a group headed by G. Bradford Cook. Other partners in the project include Klaus P. Reincke, a former Washington hotel manager, and three investors from Nashville, Tenn. CAPTION: Picture, Lincoln Hotels plans to spend $3 million refurbishing the decade-old Embassy Row. By Harry Naltchayan--The Washington Post