$165M Loan Moves Mixed-Use Hotel Project Forward in Austin
- May 07, 2008
Development of the W Hotel & Residences in Austin gets a boost now that construction financing has been put in place. CJUF Stratus Block 21 L.L.C. is behind the project, and just managed to get its hands on a $165 million loan. Corus Bank facilitated the loan for CJUF Stratus, an affiliate of Austin-based Stratus Properties Inc. and Beverly Hills-based Canyon-Johnson Urban Fund II L.P. The W Hotel development will sit downtown at 308 W. Second St. and will feature 252 guestrooms and 198 condominium units, as well as a fitness center, a 7,000-square-foot spa, a restaurant and meeting space. The 37-story tower, designed by Anderson-Wise Architects, will also offer 60,000 square feet of retail and office space, in addition to a performance venue. CJUF Stratus will seek LEED certification for the project, which will anchor the partnership’s $260 million Block 21 mixed-use development. The residential segment of the W Hotel, despite the downturn in the condominium market in most major U.S. cities, is expected to find an audience. “Austin’s condo market has been resilient versus what’s happened nationally,” Mark Sprague, a partner in the Austin office of Residential Strategies Inc., told CPN today. “In a study we published in March, we found that for the last five years plus, we have doubled the amount of condos sold compared to Downtown Houston and Downtown Dallas. The vibrancy of Downtown Austin is different from other areas.” And it’s that vibrancy, in addition to the desirable quality of life and a still affordable housing market that continues to attract buyers to the area, Sprague noted. “Twenty to 30 percent of the condos Downtown are being bought as true second homes, and that’s a market that didn’t exist five years ago.” The trendy W Hotel will also likely have a significant fan base, as researchers anticipate that the strength of Austin’s lodging market will also persist. While PKF Hospitality Research recently lowered its U.S. hotel RevPAR forecast for 2008 from 4.5 percent to 3 percent due to declining economic projections, it singled out Austin as a market destined for financial success with expected strong increases in ADR. Starwood Hotels & Resorts Worldwide Inc., owner of the W Brand, has signed a contract to manage the property. Doors of the Austin project are scheduled to open in 2010.