Humble Oil Company Tower/Springhill Suites Hotel At 914 Dallas St.

[livincinco]

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.

[Daniepwils]

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.

[lockmat]

Could the Marriott have done anything about that? Doesn't seem like it

[kylejack]

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

[Chi-Char-Hou-Dal]

If you did this on reddit you would be in bad shape.

Merge threads - being discussed elsewhere ...

[kylejack]

Did not see another thread for this.

[Chi-Char-Hou-Dal]

http://www.houstonarchitecture.com/haif/topic/27755-new-springhill-suites-hotel/#entry418974

What do you think? Good or bad thig? I personally believe better as apts

[Subdude]

http://www.houstonarchitecture.com/haif/topic/27755-new-springhill-suites-hotel/#entry418974

What do you think? Good or bad thig? I personally believe better as apts

 

Topics merged.

[scarface]

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

[kylejack]

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?

[Houston19514]

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

[lockmat]

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.

[Houston19514]

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.

[kylejack]

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.

[lockmat]

Will the hotel maintain the same 100% occupancy that the residential maintains? Dubious.

What is the usual hotel occupancy rate of downtown hotels?

[Houston19514]

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.

[kylejack]

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

[Houston19514]

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.

[KinkaidAlum]

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.

[lockmat]

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.

[kylejack]

Phoenicia needs to sell food too.

Also you might be surprised how much we downtown yuppies eat out. I'm really lazy.

[KinkaidAlum]

I'd imagine a lot of downtown business travelers eat room service or in the hotel lobby.

 

Houstonians supposedly eat out more than citizens of any other American city. I'd imagine the average downtown resident eats out more than the average Houstonian. Demographics would likely back that up (higher incomes, more singles, more men, etc...)

[Naviguessor]

Springhill Suites: No room Service. No Restaurant.

Marriott Point Chaseres and convention goers. Will be eating most/all dinners close to hotel. On Good/reasonable budgets. Bodes well.

[Andrew Broadfoot]

Phoenicia needs to sell food too.

Also you might be surprised how much we downtown yuppies eat out. I'm really lazy.

While I see the benefit of both sides, I must point out that my wife and I live downtown and spend on average $3500.00 a month eating out. Albeit, probably less than $500.00 is spent in the downtown area. However, with more new restaurants opening, we are starting to walk to dinner a little more. Edited March 29, 2013 by Andrew Broadfoot

[Houston19514]

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.

 

Travelers, even mid-range travelers are much more likely to explore and spend at restaurants 2-3 times a day than even the most intrepid downtown apartment resident.

 

Apartments have kitchens in which some people cook meals (or at least thaw a frozen something brought home from the grocery store.)   People staying in hotels, even if they have a kitchen in their rooms, most often eat out every meal of the day during their stay. 

 

Plus, the fact is, the hotel will almost certainly have more people residing in it than the apartments do.

[Houston19514]

I'd imagine a lot of downtown business travelers eat room service or in the hotel lobby.

 

Houstonians supposedly eat out more than citizens of any other American city. I'd imagine the average downtown resident eats out more than the average Houstonian. Demographics would likely back that up (higher incomes, more singles, more men, etc...)

 

Room service at a Springhill Suites Hotel?   Get serious, man.   Springhill Suites offers free breakfast.  The rest of the day, downtown restaurants get the benefit.  You cannot make a serious case that this conversion will be bad for downtown restaurants.

[kylejack]

Room service at a Springhill Suites Hotel?   Get serious, man.   Springhill Suites offers free breakfast.  The rest of the day, downtown restaurants get the benefit.  You cannot make a serious case that this conversion will be bad for downtown restaurants.

 

Since the Marriott offers room service to Humble Tower residents currently, I see no reason why they wouldn't also offer room service to Springhill Suites.

[livincinco]

This seems like an awful lot of analysis dedicated to the economic impact of the loss of 82 residence units. If that loss of revenue has a severe impact on downtown restaurants (especially considering all of the current upside) then they were probably going out of business anyway.

There are two major residential projects in the near future and a major city initiative to support future development of that kind. Downtown's population is growing. Even in the worst case scenario, this is a minor setback.

[Nole23]

I agree with livincinco. Everyone knows that downtown needs more residents and hotel rooms. So the fact that we are adding 166 more hotel rooms is a plus. While losing 88 apartments is a minor setbeck, SkyhouseHouston (336 apts) and Finger's Ballpark apts (380-400 apts) will add ~720 units over the next couple of years. Also the old Texaco building will be renevated into apartments in the near future. Keep calm and carry on...

[infinite_jim]

Awesome news! Now I can use their pool in the summer!