In Dallas, an office building that once housed United Fidelity Life Insurance has just opened its doors as Homewood Suites by Hilton Dallas Downtown. Owned by Lowen Hospitality, the 130-suite extended-stay hotel is an example of Homewood’s employment of its adaptive re-use program as it continues its aggressive expansion plan across the country.
Carrying the address of 1025 Elm St., the new Homewood Suites Dallas is not just an adaptive reuse development; it’s an historic adaptive reuse development. The 10-story structure was originally erected in 1918 as the office of Texas & Pacific Railroad. It sat vacant for a decade after United Fidelity’s departure until Lowen acquired the property in foreclosure proceedings.
“Many of us hospitality developers shy away from re-adaptive use because of the many unknowns when developing the asset, which can increase cost, but with recent historical tax incentives from the state, I feel that more projects will come on board,” Sanjay Naik, vice president, Lowen Hospitality, told Commercial Property Executive.
The transformation of the 143,000-square-foot onetime office building into the Homewood Suites Dallas carried a price tag in the mid-$20 million range.
It appears that Lowen and Homewood chose their location well–the demand in the downtown area is strong and getting stronger, spurred by a growing number of conventions and an increase in businesses moving downtown. Homewood Suites Dallas is in the thick of it, sited just a hop, skip and a job from the 2 million-square-foot Omni Dallas Convention Center, and adjacent to the DART rail station and Dallas Underground Pedestrian Network.
“It’s resulting in more training, relocation and four-day conventioneer business for extended-stay businesses, whilst still catering to the ever present government business that all extended-stay relies on,” said Naik.
But it’s not just Dallas that’s experiencing lively activity in the extended-stay segment of the hotel sector; the trend is national.
“In our opinion, we feel [extended-stay] has recovered and the market has a lot of potential that many hospitality developers before did not realize,” Naik added. “The fact that Hilton introduced Home2 Suites is further proof that the extended-stay market is moving forward with great pace.”