Zaya S. Younan, chairman and CEO of the Los Angeles-based investment group, tells GlobeSt.com that the new owner, Tog Hotel Properties of Santa Ana, CA, will keep the Holiday Inn flag in place at 2645 LBJ Freeway for three more years and then undertake a re-branding. Tog Hotel Properties couldn't be reached for comment prior to deadline.
Younan used the one-time Wyndham hotel, built in 1980 and bought in April 2004, to test the hospitality market. He plunked $1-million into the rehab and Holiday Inn Select flag. "What I'm most proud of is we were able to turn this hotel around when Wyndham couldn't," he says, "and show profitability on the operation." Younan says occupancy is 85%; RevPAR, $70; and the average daily room rate, now $119.
The hotel's sale generated a 26% IRR for Younan's backers. "It was our first and only hotel," Younan says, "and we learned a lot." In the learning curve, Younan credited much of the value-add to internal operations in similar strategies as he employs with his office properties. "We focused on management and running it," he stresses. He says revenues rose more than $1 million in the past year and EBITDA has gone 22% since the year began. "The hotel fundamentals have improved significantly in Dallas," he says.
Bill Stadler, managing director of Molinaro Koger Hospitality Brokerage's Dallas office, marketed the asset. Younan says Tog Hotel Properties was the highest of eight offers. The deal closed with financing from Credit Suisse First Boston.
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