HOUSTON – The 259-room Crowne Plaza Houston Downtown Hotel, 1700 Smith Street, has been sold for $30.7 million in cash, plus other consideration, according to the buyer, Southerly Hotels Inc.
The hotel is expected to have 72 percent occupancy rate in 2013, with an average daily rate of $134.50, room revenue per available room (“RevPAR”) of approximately $96.80. The hotel, one of the most affordable downtown hotels, is located between between Pease and Jefferson streets, not far from the Pierce Elevated.
“We’re pleased to acquire the Crowne Plaza Houston Downtown. Houston is the largest MSA in the Southern United States and is one of the top performing hotel markets in the country with a healthy economy and tremendous growth prospects,” said Drew Sims, CEO of Southerly Hotels. “Our predecessor company was involved in the redevelopment of this hotel over a decade ago and we have always hoped to be able to transfer it into the REIT.”
As a part of the transaction, the Company closed on a $21.5 million loan with Mutual of Omaha Bank collateralized by a first mortgage on the hotel.
Southerly Hotels acquired the entity which owns the Crowne Plaza Houston Downtown Hotel for $30.65 million in cash and 32,929 units of limited partnership interests in Sotherly Hotels LP, plus other consideration.
In 2013, the Crowne Plaza is expected to have hotel earnings before interest, taxes, depreciation, and amortization (“Hotel EBITDA”) of $3.2 million, and net operating income after capital reserves (“NOI”) of $2.7 million.
Built in 1963 as The Whitehall, the hotel was designed by Welton Becket Associates. In the late 1990s the 12-story hotel underwent a $25 million redevelopment and reopened in 2001 as the Crowne Plaza Houston Downtown Hotel. The hotel is ideally located in the downtown central business district and is connected via skywalk to office space occupied by KBR, Chevron, and United Airlines.
Chevron is planning a new 50-story, 1.7 million SF tower adjacent to the hotel that is scheduled for completion in the fourth quarter of 2016.
Southerly, formerly MHI Hospitality Corp., is a lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale and upper upscale full-service hotels in the Southern United States.
The Crowne Plaza will be managed by Chesapeake Hospitality.