Lowe Joint Venture Buys 3 Hotels In The Woodlands From Howard Hughes Corp. For $252M
A joint venture between Los Angeles-based investment and development firm Lowe and an unnamed institutional investor has purchased three hotels in The Woodlands from The Howard Hughes Corp. for $252M.
The Woodlands, located about 30 miles north of Downtown Houston, is a 28,500-acre master-planned community. After its inception in 1974 by oil investor George Mitchell, the community changed owners multiple times before The Howard Hughes Corp. purchased it in 2011.
The three hotels in the deal include The Woodlands Resort; The Westin at The Woodlands; and Embassy Suites by Hilton, The Woodlands at Hughes Landing. All three assets will continue to be managed by Lowe’s hospitality management subsidiary, CoralTree Hospitality, which took over management of the properties in September 2020.
Lowe will immediately begin a $25M capital investment program at the three hotels, the firm said in a press release.
The Woodlands Resort, built in 1974, is the master-planned community’s original 402-room hotel, with a waterpark, 90K SF of meeting space and an array of resort amenities. Lowe and its partner intend to make a significant capital investment to redevelop and add new facilities, the firm said. One key improvement will be a total redevelopment of the 10K SF spa, in addition to the expansion and modernization of the fitness facility and updating dining and bar options.
The 205-room Embassy Suites by Hilton, The Woodlands at Hughes Landing was built in 2015. Lowe said it plans to refresh guest rooms and upgrade some building systems.
The Westin at The Woodlands, a 302-room hotel built in 2016, will also undergo several property upgrades, including the guest rooms, the 28K SF meeting and conference space, and public areas.
Lowe co-CEO Mike Lowe said that the hotel portfolio acquisition was consistent with the firm’s broader investment strategy that targets quality, full-service hotels and resorts that attract leisure travel, but also cater to corporate and group business.
“Business has grown steadily over the past five years and the hotels have weathered the downturn and are rebounding strongly,” Lowe said in the press release.
The Howard Hughes Corp. CEO David O'Reilly said that with the sale, the firm has successfully closed $376M of the targeted $600M net proceeds in the sale of noncore assets outlined two years ago.
"The sale of our hotel assets in The Woodlands further advances the disposition of non-core assets as outlined in our 2019 strategic initiative," O'Reilly said.
The joint venture between Lowe and an institutional investor was represented by Greenberg Traurig, while CBRE and JLL represented the seller, The Howard Hughes Corp., in the transaction. K&L Gates provided legal counsel to The Howard Hughes Corp.