DiamondRock Hospitality has acquired the Lake Austin Spa Resort for $75.6 million, SEC filings show. The real estate investment trust expects to earn $1,600 in revenue per available room each night.
The 40-key resort sits on 12 acres west of downtown Austin. It benefits from a restriction on commercial development along Lake Austin, which makes the resort the only short-term lodging directly abutting the lake. In the past, the spa’s lakefront lodges have served as a fishing camp, nudist colony and rodeo ranch.
In the filings, DiamondRock listed a few opportunities for growth at the resort. It plans to add small group packages for weddings and corporate retreats, and to “streamline spa offerings” to boost profits. The REIT sees an opportunity to add about four lakeview suites, as well as other units on excess land.
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The sellers, Michael McAdams and William Rucks, bought the resort in 1997 and renovated it into a high-end getaway, the type of place with on-site organic gardens and custom lavender bath products. EOS Hospitality manages the property. Conde Nast Traveler recently ranked it the third-best spa in the U.S., reporting that “buffed and polished from their treatments, fresh-faced women of all ages (mothers and daughters, bachelorette groups, corporate execs) walk the grounds in their robes all day.”
DiamondRock is a hospitality-focused REIT that owns properties in 14 states and Washington, D.C. The portfolio spans around 9,600 rooms, and Lake Austin Spa Resort is DiamondRock’s second-smallest property by room count. Its only other property in Texas is the Worthington, a 504-key hotel in Fort Worth, operated by Marriott.
DiamondRock did not respond to request for comment by press time.