HOUSTON – (Realty News Report) – New hotels are being built in Houston faster than you can say: “No Vacancy.”
Houston has 152 new hotels (a total of 15,846 rooms) in the development pipeline, according to Rahul Bijlani, senior vice president of the CBRE Hotels group. Not all of the 152 proposed hotels will actually break ground, but many are being built now, indicating strong confidence in the Houston hotel market.
Bijlani told the CBRE Press Luncheon Tuesday that the city’s robust economy – more than 100,000 new jobs have been created in the last 12 months – is bringing about a strong rebound in the hotel sector.
“Houston’s long-term economics look good. But better than good – they look great,” Bijlani said.
Bijlani said his group has sold eight hotels in Houston so far this year and investors are focused on the Bayou City. “We’ve seen capital coming in from out-of-state and out of the country.”
The Houston hotel market had suffered when the energy industry went into a down spin. West Texas Intermediate crude fell from $100 a barrel in the summer of 2014 to below $30 a barrel in early 2016. This reduced business travel in Houston. It may be 2021 before Houston’s hotel market fully recovers, Biljani said.
The new construction adds more supply and delays the full recovery. “Demand is going up in Houston, but the supply is going up faster,” Biljani said.
Two recent hotel deals completed by CBRE:
CBRE recently arranged the sale of the Best Western Plus Houston North at 14753 North Freeway near East Airtex Drive. Sky Light Hospitality LLC purchased the 52-room asset from JPM Airtex LLC. Michael Yu, Rahul Bijlani and Tyler Bean managed this transaction.
CBRE arranged the sale of the Holiday Inn Express & Suites Missouri City West at 5007 State Highway 6 in Missouri City, Texas. Illinois-based Yeluh, LLC purchased the 84-room asset from MC Hotels, LLC. CBRE’s Michael Yu, Rahul Bijlani, Agrama Mannapperuma managed the transaction. CBRE’s Yu added, “This was a forward sale where the hotel went under contract before construction was completed in August. We are going to see more of this type of transaction as developers choose to place new assets on the market early and cycle their gains into new developments. Meanwhile, investors, like the new owners of the Holiday Inn Express Missouri City, continue to see gains by infusing capital into brand new assets in the Houston area.”