HOUSTON – (Realty News Report) – Driftwood Capital, commercial real estate firm specializing in hospitality, has acquired the Hotel Indigo Houston at the Galleria, a 131-room hotel located in the Uptown submarket.
“The hotel is well-situated in one of the largest business districts in the nation and nearby the Galleria, Texas’ largest shopping mall, providing multiple demand drivers for a hospitality asset that meets the needs of this cosmopolitan neighborhood,” said Carlos J. Rodriguez Sr., CEO of Driftwood Capital, a Miami-based firm.
The Waterwall
The Hotel Indigo, built in 2001 and renovated in 2009, is located at 5160 Hidalgo Street, between Sage Road and the Gerald D. Hines Waterwall Park.
The hotel is a couple of blocks just south of the Galleria and two Hyatt properties on Sage Road, the Hyatt Regency Galleria and Hyatt House Houston.
Also in the Galleria area, Houston-based American Liberty Hospitality recently completed development of a 14-story, 319-room, dual branded (Holiday Inn Express Houston and Staybridge Suites) on Loop 610 near Westheimer Road in Houston. At a ribbon cutting ceremony, American Liberty Hospitality CEO Nick Massad, a past president of the Greater Houston Hotel & Lodging Association, said, “We believe that the timing of this opening coincides perfectly with the return of business and leisure travel nationwide.”
Driftwood’s Buying Spree
In addition to the Hotel Indigo acquisition, Driftwood Capital has been on a hotel buying spree.
Hotel Indigo is the fourth hotel property that Driftwood Capital has added to its growing portfolio in the last 12 months. Earlier this year, the firm acquired the 316-room Hyatt Regency Fairfax in Virginia, with the firm also acquiring the 248-key Hilton Southlake in Dallas and the 399-key Sheraton Pittsburgh Hotel at Station Square in Pittsburgh, Pennsylvania in 2020. All properties are managed by Driftwood Capital’s affiliate company, Driftwood Hospitality Management a national hotel operator with over 20 years of expertise.
Driftwood Capital, which provides high-net-worth investors direct access to institutional-quality hotel assets through its unique syndication model, acquired the property through its acquisition GP fund, which targets hotel acquisition opportunities in the $30 million to $150 million range. The property will be open for syndication beginning on September 1 with a minimum investment of $50,000. Driftwood Capital, which has acquired 22 full-service hotels and developed seven new ground-up hotel projects since its inception, retains a 10 percent stake in all investments.
In 2015, the principals of Driftwood Capital launched a unique syndication model for accredited investors to access otherwise exclusive institutional-quality hotels. Through this syndication model, Driftwood Capital successfully turned $50 million of initial investment into more than $1 billion in assets across 22 hotels and 5 development deals with more than 5,100 rooms in 12 states. All Driftwood Capital funds benefit from the principals’ affiliation with Driftwood Hospitality Management, which currently manages over 70 full and limited service hotels with more than 13,000 rooms across 22 states.
Hotel Occupancy in the Covid Year
In the spring, Houston hotels rebounded. It represented a sharp contrast April 2020, when the coronavirus pandemic crushed the hotel business. In mid-April of last year, the Houston hotel occupancy rate was 23.9 percent, compared to 63.8 percent in April 2019, according to the STR hotel research firm.
Last April, STR said Houston’s average daily room rate was down 42.6 percent to $59.31. RevPAR (revenue per available room) was $14.15, down 79.2 percent from a year ago.
July 7, 2021 Realty News Report Copyright 2021
Photo: Courtesy Driftwood Capital
For more about Texas development, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon http://tiny.cc/4a2g6y
File: SOLD: Hotel Indigo Near Galleria