Houston19514 Posted March 20, 2013 Share Posted March 20, 2013 The old Humble Oil Building has been sold and they are going to convert the apartment portion into a new Springhill Suites Hotel. The building will, as of 2015, have Courtyard, Residence Inn, and Springhill Suites hotels. Humble Tower Apartments. Marriott seems to have fallen in love with downtown Houston. By 2016 we will have the following Mariott flags: Courtyard Residence Inn Springhill Suites JW Marriott Autograph Collection and Marriott Marquis http://www.bizjournals.com/houston/blog/breaking-ground/2013/03/maryland-company-to-convert-historic.html 1 Quote Link to comment Share on other sites More sharing options...
totheskies Posted March 20, 2013 Share Posted March 20, 2013 Very interesting that half of those are in one building!! Quote Link to comment Share on other sites More sharing options...
jayshoota Posted March 20, 2013 Share Posted March 20, 2013 I really like those apartments and when I moved back to Houston I tried to get one but there was a wait list. Quote Link to comment Share on other sites More sharing options...
Daniepwils Posted March 21, 2013 Share Posted March 21, 2013 I have lived in Humble Tower on and off for over 8 years sad day. The managers didn't even know about this. Everyone knew they were being sold, but didn't know that this is what they were going to do. I still don't see why. This place is 100% occupied all the time and there are wait lists to get into the building.I think they are not leasing after 2013. Quote Link to comment Share on other sites More sharing options...
arrodiii Posted March 21, 2013 Share Posted March 21, 2013 This sucks...kind of hard to bring new residents to downtown when there are no apartments/lofts for them to live. GL Daniel - let us know what they do with the remainder of your lease Quote Link to comment Share on other sites More sharing options...
KinkaidAlum Posted March 21, 2013 Share Posted March 21, 2013 Net loss. Humble Tower apartments are great. 100% leased virtually all the time. These new owners must know more than me, but I'd be surprised if a Spring Hill Suites could bring in more revenue than a 100% leased luxury apartment building. Would somebody please start turning the old Texas Co. complex into apartments already! 1 Quote Link to comment Share on other sites More sharing options...
livincinco Posted March 21, 2013 Share Posted March 21, 2013 Net loss. Humble Tower apartments are great. 100% leased virtually all the time. These new owners must know more than me, but I'd be surprised if a Spring Hill Suites could bring in more revenue than a 100% leased luxury apartment building. Would somebody please start turning the old Texas Co. complex into apartments already! It makes sense to me. They are taking an 82 unit apartment complex and converting it to a 166 unit hotel so I think that there is significant revenue gain in that. It's walking distance to most of the major companies in downtown, it's located across the street from Pavilions, and it's directly on the light rail, so that strikes me as a pretty good location for a mid-range business hotel. Also, as they reference in the article, there should be significant economies of scale because they can consolidate operations for all three brands in the building. Not so close to the convention center, but I'm guessing that they probably run shuttles to the Convention Center already, so there won't be incremental cost there. I know that there are a lot of people disappointed by the loss of residential, but I do think that there's a lot of upside to increasing the number of hotel rooms in downtown. 2 Quote Link to comment Share on other sites More sharing options...
arrodiii Posted March 22, 2013 Share Posted March 22, 2013 I know that there are a lot of people disappointed by the loss of residential, but I do think that there's a lot of upside to increasing the number of hotel rooms in downtown. Because Downtown needs less residents living in the area....who knows, soon we all may be living in Cinco 1 Quote Link to comment Share on other sites More sharing options...
KinkaidAlum Posted March 22, 2013 Share Posted March 22, 2013 166 hotel rooms does sound better than 82 apartment units. However, when was the last time any market had 100% hotel occupancy rates? Houston's current rate is just 63.7%. That's 106 rooms a night, not 166. Doing the (projected) math, here's what we can "know." 82 apartments/100% leased/$2,500 a month average = $205,000 a month 106 rooms a night/30 days a month/$130 a night = $413,400 a month So, you've doubled monthly revenue. That's good. But, then come the added expenses. First, there's the build out costs. Those are going to be huge. Everything from reconfiguring the space to buying furniture, linens, towels, etc... Then there's the monthly costs with higher insurance policies, a TON more staff (managers, desk clerks, house keepers, marketers, etc...), increased utility rates, etc... Lastly, the hotel market in Houston is a lot more volatile than the current apartment market. There could be a higher upside, but there's also a lot more risks. Additionally, the Houston downtown market is getting ready to add a Marriott Marquis, a JW Marriott, and a rumored Hilton Garden Inn. That's a lot more competition for the $$$. At the end of the day, I am a conservative investor. I wouldn't bite on this one. 1 Quote Link to comment Share on other sites More sharing options...
lockmat Posted March 22, 2013 Share Posted March 22, 2013 In general which generates more revenue, apts or hotels? I know there are a lot more variables, but... Quote Link to comment Share on other sites More sharing options...
livincinco Posted March 23, 2013 Share Posted March 23, 2013 I believe that the occupancy rate you have used though is the occupancy rate you is the rate for the city, not the rate for downtown, which has the highest occupancy in the city. There are a couple of other numbers that I would question, but I don't know where you got your numbers from and I certainly don't know what the right answers are. I would suggest though that since Marriott has two brands in the building already then they should be able to project revenue and cost with a pretty high degree of accuracy. With that kind of data available, I would be really surprised if there's a high element of risk here. Quote Link to comment Share on other sites More sharing options...
Daniepwils Posted March 25, 2013 Share Posted March 25, 2013 Not that this matters, but the Marriott just lost a huge deal with NRG next door. NRG pays for a certain number of rooms to be blocked off just for their out of town business people. They had so many complaints regarding the bums and the bus stop people at the corner (They trash that corner everyday, and the building no longer cleans it, because they said that the city should clean it) of Dallas and Main. NRG now is using the Hilton America's even though it is 5+ blocks away. 1 Quote Link to comment Share on other sites More sharing options...
lockmat Posted March 25, 2013 Share Posted March 25, 2013 Could the Marriott have done anything about that? Doesn't seem like it Quote Link to comment Share on other sites More sharing options...
kylejack Posted March 27, 2013 Share Posted March 27, 2013 The historic Humble Oil Building complex on Main Street and Dallas in downtown Houston that has been home to two Marriott concepts since 2003 — a 191-room Courtyard and a 171-room Residence Inn — is slated to add a third.RLJ Lodging Trust, a Maryland-based company, purchased the complex for $79.5 million last week, and has plans "to convert the property's apartment component into a 166-room SpringHill Suites hotel."That apartment component currently consists of 82 units that, according to real estate listings, "range from 519 square foot studios to the two grand 2,000-plus square foot penthouses." RLJ said that conversion from apartment to hotel would be complete "by the middle of 2015."The news comes at a time when the Houston Downtown Management District is pushing for more hotels near the George R. Brown Convention Center and incentivizing construction of downtown residential properties.http://houston.culturemap.com/newsdetail/03-26-13-another-new-hotel-for-downtown-795-million-buy-to-clear-historic-building-for-guests/?utm_source=sf_twitter Quote Link to comment Share on other sites More sharing options...
Chi-Char-Hou-Dal Posted March 28, 2013 Share Posted March 28, 2013 If you did this on reddit you would be in bad shape.Merge threads - being discussed elsewhere ... Quote Link to comment Share on other sites More sharing options...
kylejack Posted March 28, 2013 Share Posted March 28, 2013 Did not see another thread for this. Quote Link to comment Share on other sites More sharing options...
Chi-Char-Hou-Dal Posted March 28, 2013 Share Posted March 28, 2013 http://www.houstonarchitecture.com/haif/topic/27755-new-springhill-suites-hotel/#entry418974What do you think? Good or bad thig? I personally believe better as apts Quote Link to comment Share on other sites More sharing options...
Subdude Posted March 28, 2013 Share Posted March 28, 2013 http://www.houstonarchitecture.com/haif/topic/27755-new-springhill-suites-hotel/#entry418974What do you think? Good or bad thig? I personally believe better as apts Topics merged. Quote Link to comment Share on other sites More sharing options...
scarface Posted March 28, 2013 Share Posted March 28, 2013 (edited) So it sounds to me that they are trying to increase the downtown hotel occupancy rate at the expense of the residential rate. May appear to be good for the investor's sake, but like Kinkaid pointed out, there's a whole lot more variables involved. The monthly expenses of increased need of employees combined with the increased hotel competition does seem to cut into the profit margin quite a bit. It doesn't seem worth it. so where is that going to leave our downtown population? About at least 1,000 people less from the 4500 that was there before, including the inmates? That's going to make downtown even more less marketable place to live. I don't see the benefit in this. Edited March 28, 2013 by scarface Quote Link to comment Share on other sites More sharing options...
kylejack Posted March 28, 2013 Share Posted March 28, 2013 I don't get it, why change it to a hotel when it's got a permanent waitlist for residential? Did they think of raising prices? Quote Link to comment Share on other sites More sharing options...
Houston19514 Posted March 28, 2013 Author Share Posted March 28, 2013 (edited) So it sounds to me that they are trying to increase the downtown hotel occupancy rate at the expense of the residential rate. May appear to be good for the investor's sake, but like Kinkaid pointed out, there's a whole lot more variables involved. The monthly expenses of increased need of employees combined with the increased hotel competition does seem to cut into the profit margin quite a bit. It doesn't seem worth it. so where is that going to leave our downtown population? About at least 1,000 people less from the 4500 that was there before, including the inmates? That's going to make downtown even more less marketable place to live. I don't see the benefit in this. You think 1,000 people live in those 82 apartments? In reality, probably fewer than 100 people reside there. I am sure the new owners have crunched the numbers thoroughly and they have better numbers available to crunch than anyone on this board. Clearly, they see a benefit and that's all that really matters. Yes, slightly disappointing to lose downtown residences but there are hundreds of new ones coming on the scene soon. At the same time, the loss of the residential space is offset by the plus of additional hotel space. It's amazing how this board turns every bit of news into bad news for Houston. (FWIW, the current downtown population, including prisoners is approximately 14,000.) Edited March 28, 2013 by Houston19514 Quote Link to comment Share on other sites More sharing options...
lockmat Posted March 28, 2013 Share Posted March 28, 2013 On an average day, would a resident or visitor spend more money and spend time going out to eat, enjoying entertainment etc?This may make downtown look busier and bring more retail and restaurants.Overall, it could be a win and actually attract more residents. 1 Quote Link to comment Share on other sites More sharing options...
Houston19514 Posted March 28, 2013 Author Share Posted March 28, 2013 On an average day, would a resident or visitor spend more money and spend time going out to eat, enjoying entertainment etc?This may make downtown look busier and bring more retail and restaurants.Overall, it could be a win and actually attract more residents. ... especially when combined with the development of substantial new residential space. Quote Link to comment Share on other sites More sharing options...
kylejack Posted March 28, 2013 Share Posted March 28, 2013 On an average day, would a resident or visitor spend more money and spend time going out to eat, enjoying entertainment etc?This may make downtown look busier and bring more retail and restaurants.Overall, it could be a win and actually attract more residents. Will the hotel maintain the same 100% occupancy that the residential maintains? Dubious. Quote Link to comment Share on other sites More sharing options...
lockmat Posted March 28, 2013 Share Posted March 28, 2013 Will the hotel maintain the same 100% occupancy that the residential maintains? Dubious.What is the usual hotel occupancy rate of downtown hotels? Quote Link to comment Share on other sites More sharing options...
Houston19514 Posted March 28, 2013 Author Share Posted March 28, 2013 Will the hotel maintain the same 100% occupancy that the residential maintains? Dubious. Who cares? More to the point, why should anyone care? But even if the hotel only maintains 50% occupancy, it will have approximately as many people "residing" there on an average day as currently reside in the 100% occupied apartments. Quote Link to comment Share on other sites More sharing options...
kylejack Posted March 28, 2013 Share Posted March 28, 2013 (edited) Who cares? More to the point, why should anyone care? Because lockmat was drawing a comparison between the spending habits of a hotel visitor vs. a resident. Edited March 28, 2013 by kylejack Quote Link to comment Share on other sites More sharing options...
Houston19514 Posted March 28, 2013 Author Share Posted March 28, 2013 Because lockmat was drawing a comparison between the spending habits of a hotel visitor vs. a resident. Okay, but see my further response. There will most likely be more people "residing" in the hotel than currently reside in the apartments, even if the hotel has a relatively low occupancy rate. Quote Link to comment Share on other sites More sharing options...
KinkaidAlum Posted March 28, 2013 Share Posted March 28, 2013 If this hotel was going to be a high end hotel, then I might think the visitors would spend more downtown than Humble Tower Apartment residents. However, this is a mid-range hotel aimed at business travelers who will likely be on expense accounts. I doubt folks staying at Spring Hill Suites on a Wednesday night will be checking out shows at the Hobby, dining at Artista, or even drinking at LaCarafe. People who choose to live downtown right now do so either because they need to be very close to their office or they are drawn to downtown living. People drawn to downtown are MUCH more likely to explore, spend, and visit than a mid-range business traveler. 1 Quote Link to comment Share on other sites More sharing options...
lockmat Posted March 28, 2013 Share Posted March 28, 2013 Mid range business travelers eat out every single night though. Even they probably won't blink any eye at spending 20-25 dollars on a meal. The residents there have money too, but to eat out seven days and nights a week? Also, there will be 80+ downtown homeless residents. Nobody will be able to build fast enough for them to move in, but they are likely to return. Quote Link to comment Share on other sites More sharing options...
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