2016 Forecast Marty Collins: Hotel Supply Pipeline Could Hurt ROIs

Gatehouse Capital has about a half-dozen public-private hotel with conference projects in the works across Texas including a 132-key Hilton family hotel at the Baylor Scott & White Dallas campus in Downtown. It’s just one of the reasons we’re thrilled that Gatehouse Capital founder Marty Collins will talk hotels at Bisnow’s Dallas 2016 Economic Forecast on Dec. 1 at the Sheraton Dallas.

Gatehouse and Baylor Scott & White Health executed a long-term ground lease for the development of a 132-room hotel on Baylor Scott & White Health’s Dallas campus at the corner of Gaston Avenue and Hall Street. The land is owned by Baylor Health Care System and will be leased to an affiliate of Gatehouse for 55 years with options to extend. Parking and campus access are provided under separate agreement with the adjoining new structured parking garage and medical office building. Construction is expected to begin later in the year upon completion of site work underway by Baylor. The hotel will open in early 2017. 

Gatehouse is also developing a 102-key Courtyard by Marriott (with a 40k SF conference center) in Midlothian, which opens Dec. 15. There’s also a Fairfield Inn and Suites by Marriott in Decatur to accompany a 20k SF conference center. (The Baylor site is rendered above.) The hotel industry—especially across the Metroplex—should have another couple of years of clear sailing, Marty says, but a plethora of new product coming out of the ground and on the drawing board could very well threaten future gains.

Marty says some development could arrest further hotel value increases in select markets and products; that’s the big news in the hotel industry. He suspects that developers, lenders, owners, operators and brands are going to increasingly focus on this in the next two years despite a robust and expanding economy. As always, he adds, stronger firms with stronger relationships will likely stand out more. But, being selective on opportunities in light of this will be important. There are always compelling opportunities in any cycle, but being discerning on what demand generators find compelling in particular offerings will be even more important. Pictured: Courtyard by Marriott in Midlothian.

Register here to save your space at Bisnow’s Dallas 2016 Economic Forecast on Dec. 1 at the Sheraton Dallas.