The Clarion Hotel purchase, announced yesterday afternoon, is part of an aggressive strategy to convert properties into Radisson and Regent International brands. It carries the financial backing of the Olympus Real Estate Fund III, containing an undisclosed sum to support acquisitions nationwide.
It's a wait-and-see approach as to what will be bought next, but more purchases are a certainty. "Most likely, it will be in urban and major suburban markets," Clark Hanrattie, an Olympus executive, told GlobeSt.com, careful not to tip his hand about future buyouts that are being sought in the nation's top 25-30 markets. And, he says, the purchases won't be in the same market where Olympus' partner, Carlson Hotels, has any operations. Partnering for acquisitions is considered key to Olympus' success in the real estate market.
The number of acquisitions will be "driven by the opportunities we see and how compelling those opportunities are," says Hanrattie. The total in Fund III is not being disclosed. Fund I, which opened in 1996, had contained $270 million for real estate acquisitions while Fund II peaked at $812 million. Hanrattie did emphasize that Fund II is not an investor in the Clarion Hotel, which is being ticketed for a full makeover and rebranding as the Radisson Hotel Richardson. Radisson Corp. will manage the property.
A general contractor will be selected before month's end, with construction to begin shortly thereafter, an Olympus source told GlobeSt.com. Completion is expected in first quarter 2001. The estimated 200,000-sf hotel is situated on 6.14 acres at 1981 N. Central Expressway and Campbell Road in the core of Richardson's Telecom Corridor. The full-service Clarion has more than 200 rooms, restaurant and lounge plus flex meeting space ranging from 8,000 sf to 20,000 sf.
"The hotel is an excellent match for our criteria for strategic growth and investment," says Eric Danziger, chairman of Radisson-Olympus Capital Partners and president and COO of Carlson Hotels Worldwide. "The hotel has great potential and is situated in one of the fastest-growing areas of the Dallas/Fort Worth Metroplex.... This high concentration of telecommunications companies makes Richardson a strong market where Carlson's reservations delivery systems, global customer base and sister-companies Carlson Wagonlit Travel and Carlson Marketing Group create great demand."
The alliance is betting the greatest investment opportunities over the next three years are in buys, refurbishments and conversions in the mid-market hotel segment. The Radisson-Olympus Capital Partners believes many properties are under-managed and under-branded. The fully funded partnership has debt and equity in place to expedite buyouts, says Stephen Miller, executive vice president of development and acquisitions for the partnership.
Carlson Hotels Worldwide oversees four hotel brands: Regent International, Radisson Hotels & Resorts, Country Inns & Suites by Carlson and Park Hospitality. Carlson Hospitality Worldwide includes Radisson Seven Seas Cruises, Carlson Lifestyle Living and Carlson Vacation Ownership.
Olympus, chaired by Dallas Stars' owner Tom Hicks, was formed in 1994 as a real estate affiliate of Dallas-based Hicks, Muse, Tate & Furst Inc. and David B. Deniger. In the past six years, Olympus has completed more than $4 billion in real estate investments in the US and abroad.
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