Houston Business Journal
Cara Smith, Reporter
A hotel in the Texas Medical Center that was recently acquired is a prime example of what Houston investors are currently drawn toward, CBRE’s Rahul Biljani said.
Houston-based HH&S Hospitality LLC purchased the Candlewood Suites Medical Center from Pika Hotel Group, a Webster-area hotel group, for an undisclosed price. It’s the fifth hotel that CBRE Hotels has closed on in Houston this year and the fourth hotel that’s within the Intercontinental Hotels Group PLC brand.
The average hotel deal that Bijlani and his team have closed this year is between $1 million and $20 million, he said, and many hotels within the Intercontinental brand fit within that range.
Hotel investment activity has also picked up in part based on lenders’ renewed interest in Houston. Lenders are beginning to see Houston as more than just an oil and gas town, Bijlani said.
“What’s changed in 2017 is lender interest,” he said.
Of course, well-located properties in the Texas Medical Center that are generating positive cash flow have remained attractive to both investors and lenders.
On the lending side, though, Bijlani and his team – CBRE’s Michael Yu, Eric Guerrero and Agrama Mannapperuma – noticed a gap in the market. They’ve seen many individuals in Houston looking for hotel financing but not as many lenders who understand the nuances of the market.
In 2017, Bijlani and Yu expanded their services to offer debt and structured financing for smaller hotel transactions. The group is within CBRE’s global hotels division.
“It’s not just something we need to do for 2017,” Bijlani said. “In the long term, this could be something that can add significant value to hotel owners in Houston and Texas as we expand the team.”
The Texas Medical Center has been buzzing with hospitality activity. Just a few weeks ago, St. Louis-based Midas Hospitality bought a Staybridge Suites near NRG Stadium and the Texas Medical Center from a Beaumont-based hotels group.
Meanwhile, Houston-based Medistar Corp. and TRC Capital Partners are developing a 22-story, 353-room Intercontinental Houston Medical Center at 6750 Main St. The project will share a lobby with a Greystar apartment development dubbed Latitude Med Center. The project is expected to top out on July 19.