HOUSTON – (Realty News Report) – Host Hotels & Resorts has purchased the 223-room Hotel Alessandra in downtown Houston for $65 million. The property, which had closed in January amid a challenging Covid-era business climate, was acquired prior to a scheduled foreclosure auction.
The 20-story hotel at 1070 Dallas Street was developed by Houston-based Midway and managed by Valencia Hotel Group. It opened in 2017.
“We opportunistically acquired this 223-room hotel for $65 million, or roughly $291,000 per room, on July 2, prior to a scheduled foreclosure auction,” Host Hotels CEO Jim Risoleo said on a recent call with industry analysts. “Our ability to source and close on this distressed off-market acquisition highlights Host’s deep industry relationships, strong balance sheet and ability to act quickly and reliably. Having opened in October 2017, this hotel is in excellent condition and we expect little to no near-term capital investment.”
Midway declined to comment on the sale, which took place four days before the foreclosure event was scheduled to occur.
Risoleo noted that the $65 million purchase price represented solid value compared with the roughly $90 million estimated construction cost. The hotel’s architecture was handled by Gensler, with interiors designed by Rottet Studio.
When Midway began developing Hotel Alessandra, the firm said the property would provide the hospitality component for its three-block GreenStreet mixed-use development, which features office space, retail, restaurants and entertainment along Lamar Street, east of Main Street.
The hotel was independent of a major chain and opened just as the oil market began a prolonged downturn, creating a difficult environment for stabilizing occupancy at a new downtown Houston property.
Host Hotels, based in Bethesda, Maryland, which recently paid $161 million for the Hyatt Regency in downtown Austin, plans to reactivate the former Hotel Alessandra rather than mothball it.
Guests should expect a new name and a chain affiliation in short order. Host currently operates four hotels in Houston, including three Marriott-branded properties and the St. Regis Houston.
Reopening the hotel is expected to bring renewed energy and activity to the GreenStreet complex, which is currently undergoing a capital improvement program. Life Time recently leased about 108,000 square feet there for a fitness resort, spa, café and the company’s co-working product, Life Time Work.
GreenStreet comprises three primary elements: two levels of creative office space over ground-floor retail; the 11-story, 260,000-square-foot GreenStreet office tower, which most recently housed NRG’s Houston headquarters; and an attached garage with 1,450 parking spaces plus 24,000 square feet of additional office space. Located within walking distance of the George R. Brown Convention Center, GreenStreet is home to tenants such as House of Blues, Guadalajara and AT&T SportsNet.
A new Palm Restaurant is scheduled to open this fall in GreenStreet on the 1100 block of Lamar.
Midway’s hotel holdings include The Moran CityCentre, a 266-room property that Conde Nast has ranked among Houston’s top 10 hotels.
Aug. 10, 2021 Realty News Report. Copyright 2021.
Photo: By Ralph Bivins, Realty News Report. Copyright 2021.
For more about Texas real estate, see the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon.
Transaction: A JLL team led by John Nugent and Colby Mueck assisted Midway.
File: New Ownership for Shuttered Hotel in Downtown
File: (2) Midway. New ownership for shuttered Hotel Alessandra in downtown Houston. Host Hotels & Resorts. GreenStreet. Hyatt Regency Austin.