A Dallas-based hotel developer has acquired the former University of New Orleans tower on Canal Street downtown, the latest sign of real estate investors' growing interest around the Mid-City hospital complex and the booming Central Business District.
NewcrestImage, which recently developed an AC Hotel at the historic Cotton Exchange building downtown, plans to refurbish the 13-story former UNO building at 1600 Canal St. into a "dual-branded hotel," according to a news release.
The developer declined to release the sale price. The asking price for the building was $6 million.
NewcrestImage plans to renovate the building into a 105-room TownePlace Suites by Marriott, targeting extended-stay guests, and a 78-room SpringHill Suites by Marriott, catering to short-stay business and vacation travelers, according to the release. The hotels are scheduled to open in December 2016.
"New Orleans is a vibrant destination, and this new project will offer travelers a distinctive new option in local style and spirit," Mehul Patel, NewcrestImage chairman and CEO, said in the release.
The company says the project will be the first two-brand hotel in the New Orleans area, and the first property in the country to combine the TownePlace Suites and SpringHill Suites brands.
The hotels will share a lobby, registration desk, breakfast area and indoor bar under the same management. The rooftop will become an 8,000-square-foot garden with an outdoor bar, exercise room, and guest laundry.
The tower was built in the 1960s and later donated to the UNO Foundation by Murphy Oil. The building has sat empty since Hurricane Katrina, even as other vacant offices downtown have found new life as hotels and apartments.
The UNO Foundation sold the building to 1600 Canal LLC for $1 million in 2013.
The stock of vacant office buildings in the Central Business District is disappearing as investors have taken advantage of federal historic tax credits to convert the towers into hotels and apartments.
Developers often point to three market trends: unmet demand for more hotel rooms, more young people wanting to live downtown and anticipated demand from patients, researchers and health care providers at the $2 billion Mid-City hospital complex. University Medical Center opened in August. The VA Hospital is slated to open next year.
Investors have several projects underway around the UNO building, including a $130 million renovation of the Jung Hotel at 1500 Canal St. Next door to the UNO building, local investors recently bought the Canal Street Hotel for $4.8 million with plans on upgrading the 205-room hotel.
And hotel developers have targeted a five-story vacant office building at 2001 Canal St., directly across from the hospital complex.
1600 Canal wouldn't be the first two-brand hotel for NewcrestImage. In 2013, the company developed a Courtyard by Marriott and TownePlace Suites near Dallas-Fort Worth International Airport.
The company said it is currently renovating a historic building in downtown Dallas into an AC hotel and Residence Inn, also Marriott brands. The property is set to open in the first quarter of next year, according to the release.
NewcrestImage bought the historic Cotton Exchange at 221 Carondelet St. at auction in 2013 and invested $12 million into renovating the existing hotel into an AC Hotel by Marriott, the first AC hotel to open in the U.S. Last month, NewcrestImage sold the property to a California-based luxury hotel group for an undisclosed price.