Partners acquires ‘value-add’ property in Houston

HOUSTON — Partners Capital, the investment arm of Houston-based Partners Real Estate, has acquired the 162-key Homewood Suites by Hilton – Houston Galleria from Warwick, Rhode Island-based Magna Hospitality for an undisclosed amount.

Following the World Cup next year, the hotel, which was built in 2006, will have multi-million dollar renovations, which will include upgrades to the guestrooms, public areas, and building exterior, as well as the modernization of several building systems. As part of the sale, Hilton will award a maximum 15-year licensing term to the new owners. The hotel currently has an 84% occupancy rate. 

This is the third acquisition for Partners Capital Hospitality Fund I, which launched in June 2023. The fund’s first acquisition was a Hilton Garden Inn San Marcos in Texas, followed by the Courtyard Marriott-Atlanta Buckhead in Georgia in March. The fund seeks premium-branded, select-service and extended-stay hotels in high-growth markets in the Sunbelt.

During the last nine years, Partners Capital has sponsored seven investment funds across three investment strategies and completed more than $700 million in transactions. Its current portfolio includes more than 1.8 million sq. ft. of properties throughout major markets in Texas and the Southeast.

Adam Lair, managing director of hospitality investments for Partners Capital, told Hotel Investment Today that the deal came together quickly and it was great for the firm to acquire a hospitality asset in its hometown (its headquarters is less than a mile away from the hotel). Lair spoke to Hotel Investment Today about the deal, the appeal of Houston as a market and the current hotel M&A environment right (a follow-up story on the deal will be published on our website on Wednesday featuring an exclusive interview).

“This acquisition represents a tremendous value-add opportunity within Houston’s most sought-after submarket,” Lair said in the news release. “The opportunity to acquire a premier Hilton flag in our backyard was incredibly appealing. Uptown Houston’s high barriers to entry, combined with the market’s recent growth and tailwinds from the World Cup and Republican National Convention (which Houston will host in 2028), make this an attractive acquisition for our investors.”

“Despite a strong 84% occupancy rate, the Homewood Suites has an opportunity for substantial improvement in its competitive set,” said Andrew Pappas, president of Partners Capital. “Our renovation plan is designed to unlock that potential by modernizing every aspect of the guest experience. We are confident this strategic investment will not only enhance the property’s performance but also deliver a strong return for our investors.”