THE WOODLANDS, TX-More than four years after opening, the 341-room Woodlands Waterway Marriott Hotel and Convention Center is under contract for $137 million to Inland American Real Estate Trust Inc. The sellers are Crescent Real Estate Equities Co. of Fort Worth and Morgan Stanley Real Estate of New York City.
An Inland spokesman would confirm, but not comment on the pending purchase. In a recent SEC filing, the Chicago-based Inland reported it put up $5 million of earnest money to acquire the fee simple and leasehold interests in the 1601 Lake Robbins Dr. hotel. At the closing, Inland plans to pay about $63.5 million in cash and equivalents and obtain a loan for the balance.
Richard H. Rudd, EVP with CB Richard Ellis' Houston office, says the Woodlands Waterway Marriott, with a 70,000-sf conference center and 22,000 sf of meeting space, is a success story for the Woodlands and a great investment for Inland. “The hotel does extremely well and has achieved some of the highest room rates in the city,” says Rudd, who is not involved in the transaction.
Rudd tells GlobeSt.com that the acquisition most likely is an effort on Inland's part to boost its hotel holdings, pointing out that it hired two executives from CNL Hotels & Resorts Inc. in Orlando after its $2.4-billion sale to Dallas-based Ashford Hospitality Trust Inc. “Their job is to build up a multi-billion dollar hotel portfolio for Inland,” Rudd explains. “The two hired from CNL are sharp, and they're finding the properties.”
Construction began on the Woodlands Waterway Marriott in 2002. It opened in mid-2003. According to the SEC filing, Inland plans to retain the Marriott flag and management. Marriott will collect a property management fee equal to 3% of the hotel's gross revenue. In return, Marriott will guarantee certain operating profits for fiscal years 2007 through 2009. Rudd points out that, given the asset's age and quality of ownership, it won't need many upgrades.
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