Update: This property is no longer on the market. HFF announced the sale of this hotel on August 16, 2017.
HFF, on behalf of the owner, is marketing for sale the 305-room Holiday Inn Express and Hotel Indigo Austin Downtown/University, a newly-constructed, dual-branded hotel located in downtown Austin’s dynamic Red River Cultural District at the high-profile corner of Red River and 9th Street.
Austin, Texas, leads the nation in employment growth, with 34 percent between 2005 and 2015. Austin also has experienced a 13.2 percent population growth, which is above both the Texas average (7.2 percent) and national average (3.3 percent). Along with a growing population and workforce, Austin is visited by 22.6 million people annually. Forbes has labeled it the “Fastest Growing City” in America, and Time named it the "No. 1 City for Millennials".
Located at 805 Neches and 810 Red River Streets, the Holiday Inn Express and Hotel Indigo Austin Downtown/University's Red River Cultural District location places it in one of Austin's entertainment corridors. Home to many restaurants, bars and live music venues, including the famous Stubb's Bar-B-Q Restaurant, this district hosts the annual South by Southwest (SXSW) multi-day music and entertainment festival – one of the largest festivals in the country. The commercial property for sale is just north of the newly-formed Medical District, which will span 4.4 million square feet and is anchored by the University of Texas (UT) Dell Medical School. Additionally, the hotel is proximate to UT's 431-acre main campus, the Texas State Capitol building, the 6th Street Entertainment District and Austin Convention Center.
Recently-Constructed, High-Quality Asset: Just delivered in the spring of 2016, the dual-branded property is downtown Austin’s newest hotel and boasts vastly-superior facilities to the competitive set properties, which have an average opening date of 1992. Given the new, high-quality construction, the asset is anticipated to require minimal capital maintenance for the foreseeable future. The two hotel brands share a large outdoor pool, pool bar and lounge and the full-service Red River Tavern restaurant. Separately, the 171-room Holiday Inn Express features a complimentary breakfast, fitness center, business center and 400 square feet of meeting room space. The 134-room Hotel Indigo offers 2,560 square feet of meeting space shared across five rooms, a fitness center, business center and has a pet-friendly policy.
Significant Year-One Cash Flow with Long Runway: The hotel for sale offers investors a robust in-place cash flow with its early 2016 opening; however competitive set RevPAR penetration is only projected to reach 81.5 percent to 85 percent in the first year, providing a new owner a significant runway for future growth. Current projections eclipse 100-percent RevPAR penetration in year three.
Powerful IHG Franchise Affiliation: The property currently operates under 20-year IHG franchise agreements that run through March/April 2035. The franchise affiliation with this powerful brand family and access to its distinguished program and strong worldwide distribution system is a major competitive advantage for the hotel.
Unencumbered of Management: Currently managed by Interstate Hotels and Resorts, the property is being offered free and clear of the existing management agreement, providing complete operational flexibility for a new owner/operator.
The Holiday Inn Express and Hotel Indigo hotel for sale near the University of Texas offers investors a unique opportunity to acquire a dual-branded, newly-constructed hotel in thriving Austin, Texas. For more information on this property or other hotels for sale in Texas, contact John Bourret or Austin Brooks in HFF's Dallas office.
Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp, a Texas licensed real estate broker.