Mohr Capital, a Dallas-based privately held real estate investment firm, acquired the 350-room DoubleTree by Hilton Austin at 6505 N. Interstate 35 in Austin, Texas, for an undisclosed amount. The acquisition marks Mohr Capital’s first hospitality investment.
The six-story hotel contains almost 25,000 square feet of meeting space including a ballroom. This ballroom will be upgraded along with the guest rooms, elevators and common spaces. In all, Mohr Capital plans to invest $11 million to upgrade the property, which is ideally located near the intersection of Interstate 35 and U.S. Highway 290 in Central Austin. As part of the acquisition process, Mohr Capital brought in HEI Hotels & Resorts to manage the hotel on its behalf.
“This is the beginning of a new vertical for Mohr Capital, and we anticipate making further investments in the hospitality industry,” said Bob Mohr, Chairman of Mohr Capital. “We have been looking to get into the hospitality business for a few years. The pandemic delayed our initial investment, but this was a perfect opportunity with one of the best-performing hotels in the country during the pandemic. We believe there is a real opportunity to acquire similar assets in specific growth markets across the country, especially when we are working alongside an experienced manager like HEI.”
The Austin hotel market is among the top three markets in the U.S., attracting a great deal of hotel development as the economic recovery continues, according to CBRE Hotels Research. The Austin market will see its room inventory grow more than 4 percent in 2022. Austin is also forecast to achieve the greatest gains in demand while enjoying the greatest percentage increases in occupancy this year.
The DoubleTree is three miles from both downtown and the University of Texas at Austin, and only 20 minutes from Austin Bergstrom International Airport. Austin hot spots like Zilker Park, South Congress and The Domain are all within a 20-minute drive.
“Currently, premium select-service hotels are trading at or above replacement costs due to inflation in construction costs and general recovery expectations. This segment has followed the run-up that resorts/leisure properties experienced a year ago. On a macro basis, both strategies – the premium select-service and the resorts/leisure – appear overdone in our opinion,” said Rodrigo Godoi, Mohr Capital Managing Director – Investments.
“Enter the much-maligned full-service suburban assets that are perennially out of favor with larger investors who dislike the segment. While it is hard to be bullish on these types of hotel assets right now because the newer premium select-service product from the brands is affecting the competition, our acquisition in Austin is a little unique given the quality of the asset and its quasi-urban geography. We might be going against the grain here, but we like our strategy,” Godoi said. “We believe we are entering a golden age of group meetings and travel, and suburban full-service hotels have a competitive advantage in the meeting space they offer.”
Mohr Capital purchased the hotel from an undisclosed international real estate investment firm. Norwalk, Connecticut -based HEI Hotels & Resorts, a leading privately held hotel investment and third-party management company, is Mohr Capital’s hotel manager.
Hodges Ward Elliott Managing Director John Bourret and Director Austin Brooks represented the seller.
About Mohr Capital
Mohr Capital is a privately held real estate investment firm specializing in the acquisition, development and value enhancement of office, industrial, hotel and retail assets throughout the U.S. The Mohr Capital team has decades of experience in commercial real estate and has completed more than $1 billion in transactions. Guided by a value-driven strategy and an entrepreneurial spirit, the company relies on strong long-term relationships and possesses keen market insights needed to capitalize on undervalued or underperforming properties. With its family office structure, Mohr Capital can close quickly and has a proven track record of delivering the highest risk-adjusted returns. For more information, visit www.mohrcap.com or follow Mohr Capital on LinkedIn.
About HEI Hotels & Resorts
HEI Hotels & Resorts, headquartered in Norwalk, Conn., is a leading hospitality investment and management company that owns or operates 90+ luxury, upper-upscale and upscale independent and branded hotels and resorts throughout the United States. HEI’s branding partners include Marriott, Hilton, Hyatt, IHG, Choice and Wyndham. The company is renowned for its commitment to its associates, revenue management, profit contribution and empirically based real estate value creation, driven by a full complement of proprietary software tools to set and exceed targets on a fully integrated basis. HEI works hand-in-hand with institutional capital partners on existing assets under management as well as sponsored acquisition opportunities. The company has ample equity capital and strategically co-invests with its partners on many transactions. To learn more about HEI, please visit www.heihotels.com
