Dallas-based real estate investment firm Mohr Capital made its debut in the hotel market with the purchase of an Austin hotel.
The company bought the DoubleTree by Hilton Austin hotel at 6505 North I-35 from an international real estate investment firm for an undisclosed amount. The hotel is three miles north of downtown near the well-traveled intersection of I-35 and U.S. Highway 290 in central Austin’s St. Johns neighborhood.
The six-story hotel has 250 guest rooms and 5,000 square feet of meeting space, including a ballroom. Mohr plans to invest $11 million to upgrade the property, which includes renovating guest rooms, meeting space, the ballroom and elevators. HEI Hotels & Resorts, a Connecticut-based hotel investment and third-party management company that specializes in higher-end properties such as the Westin in Manhattan and downtown Atlanta’s Sheraton, will manage the hotel.
The acquisition is Mohr’s first in the hotel market and marks the opening of its hospitality vertical. The company has office, retail, industrial and ground-lease investments. It had been looking into getting into the market when it was delayed by the pandemic, said Bob Mohr. It now plans to buy similar properties across the country.
The purchase is part of a strategy of acquiring “the much-maligned full-service suburban assets that are perennially out of favor with larger investors who dislike the segment,” said Mohr’s Rodrigo Godoi in a press statement. In addition, he said, “our acquisition in Austin is a little unique given the quality of the asset and its quasi-urban geography. We might be going against the grain here, but we like our strategy.”
The timing certainly works well with the state of the Austin hotel market. It’s one of the top three in the country, according to CBRE Hotels Research, and room inventory is predicted to increase more than four percent in 2022.
In related deals in other parts of the state, Chatham Lodging Trust just sold three Texas properties that, along with one in Massachusetts, brought in $80 million. San Antonio’s hotel bookings and revenue topped those of Houston, Dallas and Austin in the fourth quarter of 2021.