"We've been tracking this deal for 12 months," Bleecker P. Seaman, executive vice president and COO of the Los Angeles-based Lowe's, tells GlobeSt.com about the 342-room acquisition of the newly named Richardson Hotel, which lost its Omni flag in the 100% buyout of equity interest for a property owned since 1998 by Woodrow Corp. of Houston. The deal had to pass through bankruptcy court before it could be signed, sealed and stamped as delivered, Seaman says of a pick-up that was marketed and eventually "presented" to Lowe's.

Seaman confirms the hotel at 701 E. Campbell Road sold for more than its $13.8-million assessment by the Dallas Central Appraisal District. "It's an attractive value opportunity versus what we feel replacement cost is and what this hotel can get back to on an operating basis," he says.

Seaman says the Omni contract was terminated after full weight was given to maintaining the flag, re-branding or taking the 18-year-old facility independent for a repositioning strategy with a likely five- to seven-year hold. The transaction included extra land, but Seaman says Lowe's has no plans to build out the Telecom Corridor site.

An $8-million renovation kicks off in the fourth quarter and will take all of 2005 to complete. The hotel will stay open in a floor-by-floor take-down to gut rooms and upgrade common areas. Lowe affiliate, Destination Hotels & Resorts of Englewood, CO, has been hired to operate the hotel and will be steering the renovation.

Seaman says the advertised room rates of $119 to $149 are higher than the actual, with ADR and RevPAR at sale time simply not good indicators for the asset. "This property has declined fairly dramatically. It's down 80% from its prior peak at the bottom line," Seaman says. "But, the bones of this hotel can be repositioned to be a significant presence in the marketplace."

The Richardson purchase marked the buyer's first transaction this year from a pool with $500 million gross to acquire three-star, full-service hotel properties in secondary and tertiary markets of select metros. This year, Seaman plans to shell out $200 million for the hotel purchases.

Seaman says the Richardson hotel acquisition isn't a one-off for the market, but interest in more Dallas/Fort Worth product clearly would be tied to the upside just like it was with the Telecom Corridor buy. Though it's not deeply invested in Texas, Lowe's owns a couple properties in Austin and, Seaman says, is looking for product of all type in the state's four metros to take advantage of opportunities that have crept into the market.