Courtesy of Satya Inc.
A rendering of the Hyatt Texas Medical Center
Satya Inc. has broken ground on a 350K SF new hotel development in the Texas Medical Center that will be Houston’s first Hyatt dual-branded property in one tower.
The 14-story tower will contain 159 rooms under the Hyatt Place flag, the company’s mid-tier hotel product. In addition, the tower will have 139 rooms under Hyatt House, an extended-stay hotel product.
Satya Inc. CEO Sunny Bathija told Bisnow the hotel project broke ground on Oct. 26 and should take between 20 and 22 months to complete construction, with the goal of opening by Thanksgiving 2022. The price tag for the development is in excess of $70M, Bathija said.
“This project has been in the works for the last two, three years. We’d acquired the land some time back, and we got hired to sign the franchise,” Bathija said.
The tower will be at the corner of Old Spanish Trail and Fannin Street in the Texas Medical Center, and it falls within a qualified opportunity zone, according to Satya.
Amenities will include a hotel dining area open 24 hours, a full-service restaurant and lobby café, two property bars, a lobby workstation and a more than 300-car parking garage. The seventh floor will offer an amenity deck featuring 3.5K SF of meeting space, an outdoor pool overlooking the Houston skyline, a 24-hour fitness center and a guest laundry room.
Satya owns two hotels in Houston: Tru by Hilton in Cypress and La Quinta in Spring. When the coronavirus pandemic first struck, occupancies at those hotels fell to less than 10%, but as of October, had recovered to about 50%, Bathija said.
The combination of a long lead time for the project and the construction phase means that the opening of the new dual-brand Hyatt tower should avoid the majority of pandemic-related disruption, he added.
“We are seeing a rise in the occupancy and we are not worried about two years later, because by then the vaccines will be out,” Bathija said. “There’s something terribly wrong if we’re not OK by 2022.”
Houston’s average hotel occupancy rate fell to 24.8% during April, before recovering to 46.9% in September, according to STR data. Some of that recovery is being driven by weekend leisure travelers, who are opting to take vacations a little closer to home. However, it could take until 2024 for hotel revenues across the U.S. to return to normal, according to STR’s forecast.
Bathija said that unlike other submarkets in Houston, hotels in the Texas Medical Center cater to a very specific clientele: patients and their families seeking medical treatment. For that reason, occupancy is unlikely to be greatly affected by future disruptions to tourism. But being only 6 miles from Downtown Houston means the hotel could still cater to those visitors.
“We’re hoping to get a lot of clientele from even the downtown [area] and the sports venues, once the sports come back,” Bathija said.
Satya is the owner and developer of the hotel tower. Dallas-based G2 is the project architect, HarDam Hotels and The Mathis Group are project consultants, E.E. Reed Construction is the general contractor and IBC Bank is financing the project. A property management company has not yet been selected, Bathija said.