Lessons Learned: The Transformation of a Hyatt Regency, Market briefs

In Austin, Host Hotels & Resorts has completed an extensive renovation at the Hyatt Regency Austin, adding more luster to the upswing blossoming on the south side of Lady Bird Lake, which flows through Downtown Austin.

Hyatt Regency Austin, which opened in 1982, had been separated by water from a lot of the downtown high-rise growth occurring on the north side of the lake, which is actually a small, narrow reservoir created by a dam on the Colorado River.

The price tag of the Hyatt renovation was not disclosed, but its scope was extensive with remakes of guest rooms, meeting space, restaurants and bars, lobby and pool deck.

“Virtually every square inch of the interior of this property has been touched by this transformation,” said Jeff Donahoe, general manager of the 16-story hotel.

The room count was also expanded a bit to 450 guest rooms by completing some tweaks, such as carving up the formerly massive Presidential suite. So, the Hyatt now has 450 guest rooms, up a tick from 448 rooms. Staff offices were relocated to create space for a new, glass-walled, revenue-generating meeting room overlooking the water front. After paying $161 million in cash to buy the hotel in March 2021, Host Hotels & Resorts – the largest publicly-traded real estate investment trust focused on lodging, waited almost five years after buying it to bring the Hyatt’s redo to fruition.

The Hyatt renovation adds one more point of light to the south side of Lady Bird Lake.

In 2019, Austin developer Perry Lorenz, who built downtown Austin’s 58-story The Independent residential tower, told a group of journalists that property on the south side of the lake did not compare favorably to opportunities on the north side. That was the downtown real estate narrative at the time. Watching the skyline grow proved it.

In the post-Covid era, the tides turned. Property on the south side of the lake attracted developer interest.

In 2022, Stream Realty Partners completed its RiverSouth office tower, a 15-story project on First Street, just a block away from the Hyatt. Anchored by the Baker Botts law firm, the 372,000-SF building reached 98% occupancy within 18 months after completion, a swift lease-up by Stream.