![\"Brian](\"https:\/\/ik.imgkit.net\/3vlqs5axxjf\/HIT\/uploadedImages\/Articles\/News_Articles\/Development\/Owners\/Brian-Nordahl-752x752.jpg?tr=w-768%2Cfo-auto\" "\\"Brian")
<\/a><\/p>\nAccording to
\ndata from CoStar, the top five markets in Texas (which includes Austin, Houston,
\nSan Antonio and Dallas as well as Fort Worth-Arlington in DFW market) are
\nseeing negative RevPAR performance through the first three quarters of 2025:
\nAustin is down 6.3% year-over-year, Dallas is down 1.5%, Fort Worth\/Arlington
\nis down 0.8%, Houston is down 9.6% and San Antonio is down 3.6%.<\/p>\n
Add to that a
\nchallenging environment where both the Austin and Dallas markets have closed
\ntheir convention centers for renovations for the next few years (Austin\u2019s convention
\ncenter closed in April for a $1.6 billion development with demolition complete
\nand construction underway for a new larger facility while Dallas\u2019 Kay Bailey
\nHutchinson Convention Center isn\u2019t fully closed but is undergoing a major $3.7
\nbillion renovation\/redevelopment that has limited its ability to host events).
\nBoth convention centers are scheduled to reopen in 2029.<\/p>\n
So why are
\ninvestors still showing a belief in Texas? Colin Sherman, director of
\nhospitality market analytics, Texas & U.S. South for CoStar, said history
\nis driving their decisions.<\/p>\n
\u201cFrom what I
\ncan gather, particularly in the Texas landscape, they’re looking at the
\nhistorical fundamentals of hotel investment,\u201d Sherman said. \u201cYes, this year is
\ndown\u2026 But in the long run, they see that there’s an opportunity and they
\ncontinue to maintain that optimism.\u201d<\/p>\n
Those strong
\nfundamentals are also showing up in Texas hotel sales data for 2025, Sherman
\nsaid. \u00a0<\/p>\n
\u201cIf we’re
\nnot even looking at development, but just sales in general, we’ve seen an
\nuptick in sales this year across the five major metros that STR follows,\u201d he
\nsaid. \u201cWe’re starting to see investments come back.\u201d<\/p>\n
Through
\nNovember across those five markets, Sherman said STR data shows that 18,570
\nrooms have changed hands, up a whopping 45% from 12,794 rooms through the same
\nperiod last year.<\/p>\n
<\/p>\n
DFW continues to be the number one location for investors nationwide. It’s the number one market where people want to be, no matter what’s happening with the convention center.<\/p>\n
Brian Nordahl<\/p>\n
\u201cIt’s gone
\nup quite a bit and that’s a good indicator that investors are still willing to
\nbuy and buyers are looking for deals,\u201d he said. \u201cThey’re hedging their bets,
\nbasically, that everything is going to be back and it’s still a good
\ninvestment, considering the growth and the population that’s coming to all
\nmajor metros around Texas.\u201d<\/p>\n
The
\nstrongest hotel investment market in Texas also has the nation\u2019s strongest
\nhotel pipeline for the past two years, Nordahl said \u2014 Dallas-Fort Worth.<\/p>\n
\u201cDFW
\ncontinues to be the number one location for investors nationwide,\u201d Nordahl said.
\n\u201cIt’s the number one market where people want to be, no matter what’s happening
\nwith the convention center.\u201d<\/p>\n
If anything,
\nNordahl said, investors look at the buildup to a new convention center in 2029
\nas a positive.<\/p>\n
\u201cBecause
\nwhen you [acquire] them, a lot of these hotels need to be renovated. So you do
\nyour renovation over 24 months, and then you’re ready to rock and roll when
\nthose convention centers come back online, there’s significant citywide demand and
\nthe hotels will benefit greatly,\u201d he said. \u201cMost of these investors are
\nunderwriting five to 10-year return horizons, so it falls well within those
\nhorizons to have new convention centers.\u201d<\/p>\n
Challenges
\nfor Texas markets<\/p>\n
Each of the
\ntop four cities is facing unique challenges.<\/p>\n
In Austin,
\nthe city is facing RevPAR headwinds, especially in the last two quarters (Q2
\nRevPAR was down 14.3% YOY, and Q3 was off 6.3%), and is focusing on what it
\ncalls a \u201cmini-wide\u201d concept to host events (namely, SXSW) while its convention
\ncenter is closed.<\/p>\n