Pacific Hospitality Group Ventures Inc. affiliate DG Hotels Ventures LLC bought a newly opened 256-room, dual-branded property in Dallas.
The deal for the AC Hotel and Residence Inn closed on April 20, three days before the hotel opened.
Terms weren’t disclosed, but industry sources estimated the price below the $54 million a PHG affiliate paid for the 176-room AC Hotel Irvine a little over a year ago.
The latest acquisition puts proceeds from recent hotel sales to work for Irvine-based PHG and its investment partners and moves it deeper into the AC Hotel arena.
PHG sold Bacara Resort in Goleta last year for $375 million. It bought it in 2013 for $185 million and put $27 million into renovation. It sold Wyndham Anaheim Garden Grove, a business-class hotel it developed in 1999, in January for $61 million.
With the purchase, PHG affiliates own stakes in and run 11 properties, including Paséa Resort & Spa in Huntington Beach, Meritage Resort in Napa, and AC Hotels in Irvine, Tempe, Ariz., and New Orleans.
It turned over full management of Balboa Bay Resort to owners Eagle Four Partners on April 1.
It said in 2016 that it planned to buy more AC Hotels under a $125 million investment fund and that Texas was one target. The fund is active but wasn’t involved in this buy. It currently holds the Irvine and Tempe assets, PHG Chief Investment Officer Kory Kramer said.
Life, Style
Kramer told the Business Journal when it launched the fund that Irvine-based Pacific Hospitality was “creating a lifestyle hotel company” and reiterated last week that, “We’re definitely centered on that.”
AC Hotel is an upscale Marriott brand with properties of 125 to 225 rooms in urban areas. Hotels in the lifestyle category cater to higher-end business and leisure travelers, sometimes in a younger demographic, similar to the Pendry Hotels unit of Irvine-based Montage International.
Pendry has opened hotels in San Diego and Baltimore, and plans a third to be in La Quinta, also a dual-branded effort alongside a Montage Resort layout.
Dual branding has grown in the hotel industry as a way for deals to better pencil out and to attract overlapping traveler demographics.
PHG’s new AC Hotel side has 140 rooms, the Residence Inn 116.
Amenities at the first include local liquor, Spanish wines and a tapas menu at its lounge and “European-inspired breakfasts” with croissants, prosciutto and cheese, breakfast tarts, yogurts and fresh fruit at AC Kitchen. The Residence Inn has curated guest running routes via a smartphone app; pet-friendly facilities; and grocery delivery. The two share co-working areas, a swimming pool, and 17,000 square feet of meeting space.
In still more dual branding, PHG will open a second independently aimed offering this summer, Vista Collina Resort, near Napa’s Meritage.
Vista Collina “is a different experience,” Kramer said, to include “more suites, wine- and food-tasting” and an outdoor events lawn. “Taken together, it’s the largest hotel [in the area],” and PHG believes the dual-brand will bring both leisure and corporate travelers.
EB-5
The company’s new hotel is near Galleria Dallas, a midtown regional mall with 1.8 million square feet developed in the 1980s by Hines Interests, and new midtown Dallas master-planned developments that include 6.5 million square feet of office space; about a million square feet of retail, restaurant and entertainment offerings; and 9,000 residences.
The hotel was developed by investor Civitas Capital Management LLC and hotel owner-operator Atlantic Hotels Group, both in Dallas, and built in part with EB-5 money from China.
EB-5 is an “employment-based” immigration and visa program that grants access to the U.S. in exchange for job creation via foreign investment of, in most cases, at least $1 million.
Civitas is backed in part by JD Capital Co. Ltd. in Beijing.
A downtown Dallas dual-branded, 249-room AC Hotel and Residence Inn opened in November as the first AC Hotel in Texas and the first dual-branded with a Residence Inn. Its developer, NewcrestImage LLC, sold PHG its AC Hotel in New Orleans in 2015 for $60 million.
