Billionaire Bill Gates’ recent purchase of the Four Seasons Hotel Houston is part of a recent trend of hotel investment in the area rising due to the city’s booming energy business.
Gates’ private investment arm — Kirkland, Wash.-based Cascade Investment LLC —purchased the downtown Houston hotelfrom St. Louis-based Maritz, Wolff & Co. The firms did not disclose the financial terms, though Bloomberg is reporting the deal is worth about $140 million.
The Houston hotel market is benefiting from the area’s booming oil and natural gas businesses, which are experiencing robust growth due to the surge of production from shale plays.
“We have great faith in Houston, particularly with its strong role in the global energy business,” Michael Larson, Cascade’s chief investment officer, said in a statement.
Last month, Chicago-based Walton Street Capital LLC sold two Westin hotels — the Westin Galleria Houston and the Westin Oaks Houston at the Galleria — to a unit ofInland American Real Estate Trust Inc. for a total of $220 million, Bloomberg reports.The Westin hotels went on the market in June.
Downtown hotel occupancy rates in Houston have remained above 65 percent, which is a signal that supply needs to increase. Several new hotels are under development in downtown, such as the 1,000-room Marriott Marquis, which is about five blocks away from the Four Seasons.
Houston’s average occupancy rate at Houston-area hotels through the second quarter of 2013 was 67.8 percent, up nearly 2.5 percent from 2012 and up nearly 8 percent from 2011, according to a recent report from San Francisco-based PKF Consulting LLC.
Bill Gates, chairman and co-founder of Redmond, Wash.-based Microsoft Corp. (Nasdaq: MSFT) and co-chair of the Seattle-based Bill & Melinda Gates Foundation, has held the No. 1 spot on Forbes magazine’s list of the richest people in America for 20 years. The large remainder of his wealth is tied up in Cascade, reports Forbes.
In addition, his foundation’s wealth has long been invested in Houston companies such as Waste Management Inc. (NYSE: WM) and Crown Castle International Corp.(NYSE: CCI).
Sourced From Houston Business Journal