Huge Austin hotel renovation to be funded on blockchain

Central Austin’s historic Hotel Ella is in for a major renovation, and the company behind the project plans to raise the funding for it via blockchain technology.

The plan from developer and real estate technology company Rex would quadruple the number of guest rooms and add a slate of high-end amenities. The ambitious $100 million renovation project is to be funded through sales of a blockchain token with a minimum investment of $1,000.

The current 47-room Hotel Ella is anchored by the historic Goodall Wooten Mansion. Built in 1898, the Greek-revival mansion on Rio Grande Street was a wedding present for Dr. Goodall and Ella Wooten. The socially prominent family owned the estate until the 1940s, when the building was sold and operated variously as a student residence hall, drug rehab facility and hotel. It was named to the National Register of Historic Places in 1975.

In 2013, it was picked up by Stuart McManus, founder of Austin-based private equity firm Crystal Lake Capital, who turned it into Hotel Ella. During the Covid-19 pandemic, the hotel’s revenue fell from $6.8 million in 2019 to $2.6 million in 2020. But that didn’t deter CEO Peter Rex who bought the historic property from McManus for $26.7 million in November 2021.

Rex says he intends to preserve the Goodall-Wooten Mansion as is while adding a fine dining restaurant of “Paris-level quality,” a cigar and scotch bar and a basement wine bar. However, the rest of the hotel will be razed to make room for the expansion, he says, which will include a rooftop garden and underground parking.

Rex also plans to implement voice recognition systems into the rooms and add an in-room, artificial intelligence concierge.

Though Rex said he hopes to start the renovation “as soon as possible,” he has not revealed an exact timeline for when the project might get underway — possibly due to the project’s unorthodox means of raising funding.

The Hotel Ella project will be tokenized on a blockchain, meaning accredited investors can buy fractional equity in the property through Rex’s OwnProp tokenization platform.

Back in November when Rex bought the hotel, he told a local Austin news station that OwnProp would “democratize access” to commercial real estate, allowing folks to buy and sell fractional shares of property just like trading shares of stock in companies.

The app is currently only open to accredited investors who meet certain SEC requirements, but Rex says he wants to eventually open up tokenized investments to everyday investors — for instance allowing employees at Hotel Ella to invest in the property without having to meet the current $1,000 minimum.

Rex’s obsession with Austin began in 2020 when he moved his company’s headquarters from the West Coast to the Texas capital. Shortly there after, he went full Texan and bought more than 1,000 acres of ranch land in the Llano area.

“I want to embrace what Texas is,” Rex told the Austin Business Journal in February.

Rex is also a recurring guest on Fox Business. In April, he appeared on the channel to harshly criticize a California proposal for a four-day work week, saying it was an example of the policies that caused him to move his business to Texas.

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