Higher RevPAR Despite Hotel Construction

DALLAS—By year-end 2017, Dallas hotels are forecast for a revenue per available room increase of 1.4%, despite the many hotels planned and under construction. The RevPAR increase is the result of an estimated decline in occupancy of 1.9% and a 3.4% gain in average daily room rates, according to CBRE Hotels. However, the 1.4% advance in Dallas RevPAR is less than the national projection of a 3% increase, GlobeSt.com learns.

One of the many hotels under construction is the 16-story Virgin Hotel Dallas, a 268-room upper-tier hotel located in the Design District. PCCP provided a $63.5 million construction loan to Dunhill Partners for the construction. With the loan in place, the fully entitled project is now underway, with completion anticipated in late 2019. The financing was arranged by Dallas-based Hamilton Realty Finance.

The project will feature a full-service lobby restaurant, poolside bar on the amenity deck and additional upscale amenities including the Commons Club, which is a staple of the Virgin Hotels brand. Upon completion, the property is anticipated to be the third Virgin flagged hotel in the United States. There is currently one Virgin Hotel operating in Chicago, with another scheduled to open in San Francisco later this year.

Situated on a 1.05-acre site at 1909 Hi Line Dr., the area is located with highway frontage and access to Interstate 35 on the north, and to Riverfront Boulevard and the Trinity River on the south. The hotel will be in the midst of a thriving area that has undergone much development activity during the last few years, including several thousand apartment units. In addition, the Design District is home to a growing number of popular boutiques, art galleries, restaurants, bars and cafes.

In other hospitality news, Hilton Dallas Park Cities, a 224-room hotel in the prestigious office district, Preston Center, recently sold for an undisclosed price. Holliday Fenoglio Fowler LP marketed the property on behalf of the seller. Woodbine Legacy Investments purchased the hotel, which is the new fund's inaugural purchase.

The 11-story Hilton hotel was completed in 2001 and extensively renovated between 2012 and 2013.  The hotel features an array of amenities, including a heated outdoor rooftop pool with city views, business center, fitness center, lounge, 10,259 square feet of meeting and event space, lobby bar and full-service restaurant. Situated on almost a full acre at 5954 Luther Ln., the property is bordered by affluent neighborhoods and the Dallas North Tollway, providing guests access to demand generators, including Southern Methodist University, the 2 million-square-foot NorthPark Center mall and 3.1 million square feet of class-A office space.

The HFF investment sales team representing the seller was led by managing director John Bourret and associate director Austin Brooks.