HOUSTON – (Realty News Report) – Driftwood Capital, a commercial real estate firm focused on hospitality, has acquired the Hotel Indigo Houston at the Galleria, a 131-room property located in the Uptown submarket.
“The hotel is well-situated in one of the largest business districts in the nation and adjacent to the Galleria, Texas’ largest shopping mall, providing multiple demand drivers for a hospitality asset that serves the needs of this cosmopolitan neighborhood,” said Carlos J. Rodriguez Sr., CEO of Driftwood Capital, a Miami-based firm.
The Waterwall
Hotel Indigo, originally 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 sits a couple of blocks south of the Galleria and is near 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 a 14-story, 319-room dual-branded development featuring Holiday Inn Express and Staybridge Suites on Loop 610 near Westheimer Road. At the ribbon-cutting ceremony, American Liberty Hospitality CEO Nick Massad, a past president of the Greater Houston Hotel & Lodging Association, said, “We believe 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 actively expanding its hotel portfolio.
Hotel Indigo is the fourth hotel Driftwood Capital has added within the past 12 months. Earlier this year, the firm acquired the 316-room Hyatt Regency Fairfax in Virginia. In 2020, it acquired the 248-room Hilton Southlake near Dallas and the 399-room Sheraton Pittsburgh at Station Square in Pennsylvania. All properties are managed by Driftwood Capital’s affiliate, Driftwood Hospitality Management, a national hotel operator with more than 20 years of experience.
Driftwood Capital provides high-net-worth investors direct access to institutional-quality hotel assets through its syndication model and acquired the Hotel Indigo through its acquisition GP fund, which targets hotel purchases in the $30 million to $150 million range. The property will be open for syndication beginning September 1 with a minimum investment of $50,000. Driftwood Capital, which has acquired 22 full-service hotels and developed seven ground-up hotel projects since its inception, typically retains a 10 percent stake in each investment.
In 2015, Driftwood Capital’s principals launched a syndication model that enables accredited investors to access institutional-quality hotel investments that were previously difficult to reach. Through this approach, Driftwood turned an initial $50 million of investor capital into more than $1 billion in assets spanning 22 hotels and five development deals, totaling over 5,100 rooms across 12 states. Driftwood Hospitality Management, affiliated with the firm’s funds, currently manages more than 70 full- and limited-service hotels with over 13,000 rooms across 22 states.
Hotel Occupancy During the COVID Year
Houston hotels showed signs of recovery in spring 2021, a marked contrast to April 2020 when the pandemic devastated demand. In mid-April 2020, Houston’s hotel occupancy rate fell to 23.9 percent, compared with 63.8 percent in April 2019, according to STR, the hotel research firm.
In April 2020, STR reported Houston’s average daily room rate declined 42.6 percent to $59.31. Revenue per available room (RevPAR) fell to $14.15, a 79.2 percent drop from the previous year.
July 7, 2021 Realty News Report Copyright 2021
Photo: Courtesy Driftwood Capital
For more about Texas development, see the book Houston 2020: America’s Boom Town – An Extreme Close Up by Ralph Bivins. Available on Amazon.
File: SOLD: Hotel Indigo Near Galleria