Joint Venture Buys hotel in Houston for Upscale Shopping Center

Beeson Properties KNA Partners has picked up a shuttered hotel in west Houston with plans to replace it with a shopping center with high-end restaurants and shops.

The locally based developer led by John Beeson bought the 173-room La Quinta Inn & Suites by Wyndham Houston Galleria Area at 1625 West Loop S. for an undisclosed price, Bisnow and the Houston Business Journal reported.

The seller of the 3-acre property east of I-610 and northeast of The Galleria was KB Houston Galleria, a La Quinta franchisee. The sale marks the first redevelopment site near the Loop frontage in the Galleria area since the pandemic.

“I don’t like hotels, the tenants move out every night,” Beeson told Bisnow.

Broker Rob Banzhaf of Newcor Commercial Real Estate, represented the seller in the deal. Brokers Meredith Cullen and David Carlos of Newmark, and Sam Arnold of Cullen Properties, represented the buyer.

The seller’s initial offer for the 102,200-square-foot hotel was $225 per square foot, Cullen said, which works out to nearly $30 million. While he declined to state the sale price, he said he was able to bring it down to close the deal. The property’s appraised value as of Jan. 1, 2024, was nearly $17 million.

Plans call for bulldozing the six-story hotel to build a 95,000-square-foot building with shops, restaurants and a parking garage.

The two- or three-story building would be surrounded by a parking lot, with many of the site’s oak trees preserved for shade and ambiance. “The trees are half my reason for buying it,” Beeson said.

The $35 million project, designed in-house, would target upscale restaurants and shops, similar to Beeson’s 85,000-square-foot Midlane shopping center on Westheimer Road between West and Mid lanes, home to Bosscat Kitchen & Libations.

Several restaurateurs have already expressed their interest in leasing, Beeson said. Demolition could start in as early as 30 days, with plans to complete the development this year, he said.

The closure of the La Quinta Inn prior to the sale represents a demise of similar businesses unable to keep up with rising land values along the Loop.

The La Quinta franchisee had operated a 20-hotel portfolio before recently terminating the franchise agreement, according to Banzhaf, who marketed the property for more than two years.

This hotel wasn’t able to keep up with the land value, he said, adding that the corridor has several properties facing a similar plight. The 312-room boutique Hotel Derek, a block south of the La Quinta Inn, closed in June after more than two decades.

Beeson Properties KNA Partners, founded in 1995, owns 18 shopping centers and commercial properties in Houston, with one in the pipeline, according to its website.

— Dana Bartholomew