A locally owned chain of Texas boutique hotels is up for sales.
The Hotel ZaZa at 2332 Leonard Street in Uptown Dallas has hit the market, the Dallas Morning News reported. Two ZaZa hotels in Houston and one in downtown Austin are also up for grabs. Eastdil Secured has been hired to market the properties.
The portfolio comprises 641 rooms, and they’re expected to fetch more than $300 million, the outlet said, citing a real estate newsletter.
Hotel ZaZa was founded by developer Charles Givens in 2002, starting with the Dallas location. Givens later opened a hotel in Houston’s Museum District at 5701 Main Street, followed by one in Houston’s Memorial City on Katy Freeway. The Hotel Zaza in downtown Austin opened most recently, in 2019.
The hotel market is considerably different in each of the three cities. In March, Houston was ranked as the worst hotel market in the nation by Trepp, as its occupancy rate hovered around 53 percent, according to the report.
Hotels in the Dallas-Fort Worth area, meanwhile, are being built at a record pace, with 251 projects in the pipeline. North Texas has seen an uptick in population and corporate relocations, and hotel developers are champing at the bit to take advantage of the growth. However, high interest rates and construction could stall projects.
Despite the slew of events that attracts visitors from all over the globe, Austin’s lodging industry is still struggling to return to pre-pandemic form, as its occupancy rate failed to break 70 percent last year, according to Marcus & Millichap. Akin to Dallas, an influx of hotel supply could cause occupancy rates to drop even lower in the future.
—Quinn Donoghue
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