WILLIAMSBURG, Va.—Sotherly Hotels announced that the company has acquired the entity which owns the Crowne Plaza Houston Downtown Hotel for $30.65 million in cash and 32,929 units of limited partnership interests in Sotherly Hotels, plus an additional cash amount for the hotel’s working capital as of the closing date. The 259-room, upscale, full-service hotel is located in downtown Houston, Texas. The property will be managed by Chesapeake Hospitality.
“We’re pleased to acquire the Crowne Plaza Houston Downtown. Houston is the largest MSA in the Southern United States and is one of the top performing hotel markets in the country with a healthy economy and tremendous growth prospects,” said Drew Sims, chief executive officer of the company. “Our predecessor company was involved in the redevelopment of this hotel over a decade ago and we have always hoped to be able to transfer it into the REIT.”
For year-end 2013, the company currently forecasts that the hotel will operate at approximately 72 percent occupancy, with an average daily rate (ADR) of approximately $134.50, room revenue per available room (RevPAR) of approximately $96.80, hotel earnings before interest, taxes, depreciation, and amortization (Hotel EBITDA) of approximately $3.2 million, and net operating income after capital reserves (NOI) of $2.7 million.
Built in 1963 as The Whitehall, the hotel was known as Houston’s iconic business hotel. In the late 1990’s the hotel underwent a $25 million redevelopment project and reopened in 2001 as the Crowne Plaza Houston Downtown Hotel.