Downtown dual-branded hotel project receives $37M construction loan

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By Jeff Jeffrey – Senior reporter, Houston Business Journal

Nov 2, 2022

A dual-branded hotel planned for downtown Houston has received a $37.4 million loan to fund its construction.

Dallas-based Hall Structured Finance said in a news release that it originated the first lien construction loan for the Home2 Suites by Hilton and Tru by Hilton being developed by Houston-based PA Hospitality.

Hall Structured Finance said the 221-room hotel at 1540 Leeland St. is expected to be completed by the third quarter of 2024. The mortgage broker was Arriba Capital with whom Hall Structured Finance has partnered with on several deals.

“PA Hospitality has a history of developing and managing quality properties that are leaders in their respective submarkets. Their successful track record, paired with the prime downtown Houston location, makes this a very attractive development,” said Brian Mitchell, vice president of HSF and the loan’s originator. “We continue to be bullish on providing financing to high quality sponsors secured by well-conceived, well-located projects.”

When it is completed, the hotel will offer extended-stay options, as well as traditional lodging options.

The building will comprise nine stories and will encompass 123,000 square feet.

The Houston Business Journal reported in February that the project is expected to cost $35 million.

PA Hospitality President Alif Maredia previously said his company hopes to capitalize on travelers seeking out lower-cost accommodations when they attend events at the George R. Brown Convention Center and sporting events.

San Antonio-based Source Strategies Inc., which tracks Texas hotel data, recently reported that 57.2% of available hotel rooms in Houston were occupied during the second quarter, with a revenue per average room of $64.89.

“Lodging consumers, for the most part, are ready to be done with pandemic concerns,” says Todd Walker, Source Strategiespresident. “Group and convention travel is returning, even if attendance is slightly lower than pre-pandemic times. Corporate travel is the last piece and much of that is beginning to return.”

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