Development to Anchor Retail Area in the Fastest-Growing US Metropolitan Area
The Dallas area, which only ranks behind New York City in terms of its new hotels in the construction pipeline, remains a hot booking for hotel developers and investors seeking to enter the region with yet another project getting started in North Texas.
An affiliate of RREAF Holdings, a Dallas-based real estate investment and development firm, has recently begun work on a full-service, six-story, 239-room Marriott Delta Hotel along State Highway 114. This is the initial phase that's anchoring a larger 16-acre mixed-use development in Southlake, Texas, which is about 30 miles northwest of downtown Dallas. The mixed-use development's future phases are expected to include as much as 240,000 square feet of Class A office, restaurant and retail space, along with a structured parking garage to accommodate future density.
The hotel, expected to cost $35.6 million, according to state records, will set the tone for the much larger development in Southlake to help create a "timeless sophisticated space," said Milton Anderson, vice president at Merriman Anderson Architects, the project architect.
"The hotel features a modern design borrowing materials and color from the surrounding context," Anderson said in a statement. "The warm blend of limestone, metals and stucco create a modern flavor for the architecture setting the tone for the palette that will be use for the rest of the masterplan."
The hotel design also accommodates about 10,000 square feet of meeting space and a full-service restaurant and bar, as well as an outdoor pool and patio to cater to visitors. Construction on the Delta hotel is expected to finish by fall 2020.
Dallas ranks as the second-largest market in the United States based on the number of new hotels planned, behind New York City, according to the latest data from Lodging Econometrics, a hospitality consultantcy firm.
Dallas hoteliers have 163 new hotels in the construction pipeline readying to deliver nearly 20,000 hotel rooms, reports Lodging Econometrics. New York City has 170 projects in the construction pipeline set to deliver 29,247 rooms. Los Angeles, which ranks as the third-largest market in terms of new hotel construction in the pipeline, has 158 projects and more than 25,000 rooms underway.
"There's an incredible amount of private equity looking for hotel projects with everywhere you look a new fund getting started," said Hank Wolpert, director of investment sales at Tabani Realty, a hotel-focused real estate brokerage based in Dallas. "We're going to see more of the same in the future because Dallas is still considered a good entrepreneurial market and hotels are still making good revenue, although there seems to be diminishing margins as a whole, nationally."
Wolpert said he expects hotels to pop up in adaptive reuse projects of older buildings in the city, as well as apartments to enter the mix in bringing hotel-like units to the region.
For the record:
Merriman Anderson Architects is the project architect. Hill & Wilkinson is the general contractor. SMR Landscape Architects and Cole Engineering are also working on the project. BancorpSouth Bank has provided the construction loan financing the project. Mosaic Real Estate Investors is providing the mezzanine debt. RREAF and RREAF Investors are also bringing equity to the capital stack.