Uptown Hotel Market

[MontroseNeighborhoodCafe]

INDUSTRY WRAPUPS

From the December 10, 2004 print edition

Commercial Real Estate Beat

Luxury hotel crowd checking out Galleria area

Jennifer Dawson

Houston Business Journal Houston Business Journal

Word on the street has a new luxury hotel making reservations in the Galleria area.

The buzz in the real estate community makes it sound like development is imminent, but the hotels themselves have nothing new to report.

Sources says no development deals have been finalized, but from the amount and duration of due diligence being conducted, it looks like a high-end hotel in the Galleria area is a very distinct possibility.

"There's definitely a lot of chatter going on," says Tucker Knight of Holliday Fenoglio Fowler, the commercial real estate financing firm.

"There is really no true five-star hotel in this city," Knight says. "I am talking to two different groups, two different developers, about the potential of a five-star hotel coming to the Galleria area."

Knight says he does not have clearance from the developers to release their names.

High profile hotel names being thrown around by developers and industry sources are Ritz-Carlton, W Hotel, Four Seasons and Peninsula Hotel. The Four Season is the only one of the group that has currently has a Houston presence.

The return of a Ritz-Carlton property has been mentioned the most in the latest round of hotel scuttlebutt.

"Ritz would like very much to be in the Galleria," says John Keeling of PKF Consulting, which tracks the hotel industry. "They're trying to decide which developer and which site is actually going to happen. They don't want to hook up with someone who's not going to get the job done."

Knight agrees that the Ritz-Carlton is being heavily pursued.

"There are so many people chasing this Ritz-Carlton deal -- local developers and outside developers," he says.

Vivian Deuschl, a vice president of public relations with the Ritz-Carlton Hotel Co., says the management company is continuously talking to developers about potential hotel sites.

"On any given day, we're probably having discussions with developers on their projects in major cities all over the world," says Deuschl, noting that a project announcement would not be made without a signed agreement.

"There are always rumors about us coming into markets," she adds. "We are always looking at the major cities in the United States where there is not a Ritz-Carlton, where we think the market is strong enough to support an ultra-luxury hotel."

The Ritz-Carlton managed a site in the Galleria area until 1997 when a legal dispute with the property owner prompted the hotel management company to check out of the market.

Starwood Hotels & Resorts later bought the hotel at 1919 Briar Oaks Lane and in 1999 changed the name from The Luxury Collection Hotel in Houston to The St. Regis Houston.

In 2001, longtime plans for a Ritz-Carlton in the old Texaco building downtown fell through when the developer, leTriomphe Property Group, lost its equity partner in the $160 million project.

W Hotel, another one of the Starwood stable, is also mentioned a lot in development talks, but no deal has been struck to bring that brand to town.

"Houston would be an ideal city for a W, as we're looking at some of the most vibrant cities in the world," says Jane Glastein, public relations director of W Hotels Worldwide. "However, at this point, we can't confirm any plans to build a property there."

PKF's Keeling says developers typically drop the W or Ritz-Carlton names into their plans, even though they don't have deals lined up with the hotel companies.

"I think a W will get built in Houston. The question is where and when," Keeling says.

He seems just as confident about a Ritz-Carlton, but says that development may be four to five years off.

"I also think a Ritz-Carlton will be built in Houston, probably in the Galleria," says Keeling.

He adds that a Galleria-area property would likely include for-sale condominiums in order to make the economics work.

One of the more exotic hoteliers in the mix is the Peninsula Hotel, which has properties in Bangkok, Beijing and Manila, as well as New York City, Chicago and Beverly Hills.

Kate Kelly, a Peninsula spokeswoman, says the company is not considering opening a Houston hotel at this time. Peninsula is more focused on developing properties in Tokyo, Shanghai and Europe, she says.

The Four Seasons could also be considered a long shot, seeing how a location in Houston already exists. The downtown Four Seasons, owned by Maritz, Wolff Co., has 404 rooms, 58 apartments for lease and 49 condominiums for sale.

Elizabeth Pizzinato, a spokeswoman with the Four Seasons corporate office, says a second Houston location is not in the firm's development pipeline.

"I don't have word of anything like that happening," she says. "There's really nothing behind that right now, as far as I know."

A handful of properties in the Galleria area are being considered as possible hotel sites, most of them along Post Oak Boulevard.

The Pavilion retail center between Westheimer and San Felipe has been discussed as a potential site. Mishael Radom of Radler Enterprises Inc. who owns the property did not return phone calls.

A Compass Bank site at 2200 Post Oak has also been considered. And a site near Richmond formerly occupied by Steak and Ale Restaurant seems to be in play.

Lining up a prestigious hotel operator and securing a site are just a couple of pieces in the development puzzle. Keeling says the most difficult step will be obtaining financing.

"Right now it's a very difficult financing environment for new hotels," Keeling says. "Five-star hotels are probably the most difficult thing you can build and try to finance. It could take years."

jdawson@bizjournals.com

[citykid09]

Any news on new luxury Hotels?

[citykid09]

What's the name of that new brand of Hotel (first one anywhere) that a Houston business man is building in the Galleria area.

It's suppoused to be like a Ritz Carlton, and the chain will be Headquarterd in Houston.

[kjb434]

The Granduca in the another post is currently under construction. I don't know about the Ritz-Carlton project.

[citykid09]

Does anyone know what hotel this is going up in the Galleria area? Nice looking in my opinion!

Edited March 7, 2006 by citykid09

[WesternGulf]

Homewood Suites.

[citykid09]

Not to compare Houston to Dallas or Atlanta, But when is Houston going to get some new Luxury Hotels?

Dallas is about to open a W Hotel, Ritz Carlton, and just announced yesterday Mandarin Oriental Hotel. Also Trump announced a project there.

Atlanta just annonced there third W Hotel. Also Trump announce the other day he would be building there also.

I Thought I saw something about a W Hotel going in a new project near the Highland Village Area.

[ricco67]

Houston has quite a few 4 and 5 star hotels.

JW Marriot

Hotel Intercontinental

Hilton Americas

But you also have a host of boutique hotels:

The Magnolia

Hotel Icon

The Alden

Club Quarters caters mostly to the business crowd, so I wouldn't throw them with the same with the preceeding list.

Crowne Plaza and the Hyatt downtown are supposedly 4 stars, but I wouldn't necessarily know that.

[Jeebus]

Not to compare Houston to Dallas or Atlanta, But when is Houston going to get some new Luxury Hotels?

Dallas is about to open a W Hotel, Ritz Carlton, and just announced yesterday Mandarin Oriental Hotel. Also Trump announced a project there.

Atlanta just annonced there third W Hotel. Also Trump announce the other day he would be building there also.

I Thought I saw something about a W Hotel going in a new project near the Highland Village Area.

But you are comparing them.

Edited May 11, 2006 by Jeebus

[KinkaidAlum]

We also have

St. Regis Hotel

Omni Hotel off of Woodway

Lancaster Hotel

Houstonian Hotel

Colombe D'Or

Westin Oaks

Westin Galleria

Hotel Sofitel (nice French chain up near IAH)

and the soon to open Hotel ZaZa (former Warwick)

[SMUrban]

Trump said he was "scouting" locations in Dallas. This came out in the paper a few weeks before he was to speak at a motivational seminar. The general thought was that he did this to get his name in the paper and it has been documented that he has pulled the same trick in other cities before similar seminars. The condo market in Dallas is white hot, but there are no firm or even preliminary plans for a Trump branded development.

[editor]

I think the Four Seasons would be surprised to learn it's not a five-star hotel.

Shangri-La is starting a big expansion project into the United States. Maybe one will land in Houston.

[RyanJX5]

I think the Four Seasons would be surprised to learn it's not a five-star hotel.

Shangri-La is starting a big expansion project into the United States. Maybe one will land in Houston.

Shangri-La would be amazing for Houston, but I would love to have a Penisula even more than a Ritz-Carlton. Hotel Derek is the current answer for a W; the Bistro Moderne on site has some very good french faire,and anywhere where Lynn Wyatt takes all of her celebrity buddies is a hot spot. I can see Ritz Carlton opening in the Boulevard or even a W there.

Edited May 13, 2006 by RyanJX5

[NewMND]

I can see Ritz Carlton opening in the Boulevard or even a W there.

Well from the rumors I've read just around here, it would seem that the Ritz is interested in Boulvard Place, while the W is interested in High Street

[Trophy Property]

Well from the rumors I've read just around here, it would seem that the Ritz is interested in Boulvard Place, while the W is interested in High Street

I heard Ritz Carlton is aching to get back into the Houston Market. Crescent is developing a Ritz Carlton in Dallas right across from the Crescent Hotel. The Rtiz Carlton is a mix condo / hotel / spa destination and seems to be a hot development. It would not suprise me if this concept was part of the BLVD project. Wulfe will get a big time Hotelier in here.