239-Room Landmark Resort Will Open Portfolio for Private Offering

Behringer Harvard expects to pump another $14 million into the Texas Hill Country resort at 101 Lakeway Dr., a 16.5-acre landmark in the City of Lakeway on a peninsula along the shores of Lake Travis near Austin. The redevelopment plan is still preliminary, but the one being mapped out right now calls for retrofitting a 69-room wing into condos and building some more for the three-building resort, M. Jason Mattox, SVP with Dallas-based Behringer Harvard, tells GlobeSt.com.

Mattox says Lakeway Inn Resort will be rolled into the portfolio for the Behringer Harvard Strategic Opportunity Fund I LP after it breaks escrow in the next week or so. Yesterday's hotel acquisition took 45 days start to finish after Behringer Harvard stepped up for an asset that lost two other contracts in a 14-month run on the market. The speedy closing resulted from the buyer's longtime familiarity with a resort that abuts a 410-slip marina owned by Dallas-based Sun Resorts International, of which Robert Behringer was a general partner and remains an investor. "We have been integrally involved in the hotel," Mattox says, "that's why it was so easy for us to underwrite it."

Armed with a fund targeting opportunity plays, Behringer Harvard snagged a holding assessed at roughly $14.9 million in today's market, down nearly $12 million from a Travis County assessment just four years ago. Mattox says RevPAR is $63. Online reservations show rooms can be had for a minimum of $98 per day and a maximum of $340 for a one-night golf package for two.

Lakeway Inn Resort was built in 1962, expanded in 1990 and bought in 1996 by Lend Lease. In 2000, the 170-suite Lodge Building underwent a top-to-bottom makeover. Behringer Harvard, planning a three- to five-year hold, hopes to have the next renovation plan ready to unveil in three to six months, according to Mattox. The new owner's first move will be to huddle with the Montvale, NJ-headquartered Dolce International Holdings Inc., which ran the resort from 1985 until 2002 and now is back in the driver's seat, so they can map out a plan to glean maximum value from a redevelopment seeded by the addition of condos. "We are trying to figure out what the city can support," Mattox says, "but in the end, we'll be left with a conference center resort that is totally self-sustaining."

"Lakeway has a well-established name in the state of Texas as a resort and conference destination," says Robert Behringer, president and CEO of Behringer Harvard. The renovation, he adds, "should stimulate a renaissance of the property that will re-engage the local community and bring the facility back to prominence in the region." The facility has 20,000 sf of meeting space in the Lodge Building and Travis Building while the Peninsula Wing is all room space.

Lakeway Inn Resort, with two pools and a freestanding restaurant, was the first facility of its type in Central Texas and took the field as a top destination for corporate meetings and retreats as well as family vacations. The Jones Lang LaSalle Hotels team of Arthur Buser in Los Angeles and Evan Stone in Dallas brokered the transaction for the New York City-based seller.