Real Estate Rumblings
Houston developer Giorgio Borlenghi is beginning work this week on the Hotel Granduca Austin, an Italian-styled luxury hostelry that will command some of the highest nightly rates in Texas.
Built on a hillside site in west Austin, the nine-story, 194-room boutique hotel is scheduled to be completed late next year, near the northwest corner of Bee Caves Road and Loop 360.
The Hotel Granduca Austin will be competing in a rarified league with the Four Seasons Hotel and a handful of other Austin hotels in the highest tier of room rate, service and luxury amenities. Room rates are expected to be $300 a night, or more.
“It’s in an area of town that’s underserved by hotels. It’s only 15 minutes away from downtown and from UT,” says Borlenghi.
The new hotel will be the second hotel bearing the “Granduca” brand name. The original Hotel Granduca, which has an average daily rate of $340, opened eight years ago near Houston’s Galleria.
Austin is by far the strongest hotel market in Texas with a citywide room rates and an average occupancy rate of 75 percent, which is basically as good as it gets, says hotel consultant Bruce Walker of Source Strategies. The only city to come close to Austin is Houston, with a 69 percent occupancy rate, but other major Texas cities are far behind Austin.
“Austin is a very, very vibrant and amazing hotel market,” Borlenghi says.
At first, Borlenghi began looking in downtown Austin for a new hotel site. But large parcels were not available and the downtown market is getting ready for several major new hotels to be completed, including the 1,000-room J.W. Marriott.
He soon located this Westlake area site off of Bee Caves Road and marked out the five acres for planting the Granduca hotel flag.
“It’s in an area of town that’s underserved by hotels. It’s only 15 minutes away from downtown and from UT,” says Borlenghi. “It gives us the opportunity to create our own market and something different, offering a real alternative to people traveling to Austin.”
“The four most successful hotels in Texas are the Four Seasons in Austin, the Hotel Granduca in Houston, the W in Austin and the Driskill in Austin,” Borlenghi says.
Borlenghi, who was born in Italy, said the hotel will have in-house restaurant that will feature northern Italian cuisine similar to the Houston Hotel Granduca’s Ristorante Cavour – recently named one of the best Italian restaurants in Houston.
Gromatzky, Dupree & Associates of Dallas is the architect for the Austin hotel. Ermy Borlenghi Bonfield of 3-E Designs, Inc. of Houston, Giorgio Borlenghi’s sister, is handling interior design of the property and his son, Alex Borlenghi, who graduated from the University of Texas at Austin last year, is working on the hotel as vice president of development for Interfin.
Room rates for the Hotel Granduca Austin have not been established. But Borlenghi says he hopes transport to Austin the success he’s had with the Hotel Granduca in Houston, one of the top-grossing hotels in the state, in the all-important “revenue per available room” yardstick used by the hospitality industry.
“The four most successful hotels in Texas are the Four Seasons in Austin, the Hotel Granduca in Houston, the W in Austin and the Driskill in Austin,” Borlenghi says. “The average daily rate we have in Houston is $340, which is really at the top of the market. Austin’s Granduca will be quite similar.”
Borlenghi’s Interfin Cos. has developed a number of office and residential towers in the Galleria area of Houston, including Four Oaks Place and Four Leaf Towers and Uptown Park.
The Hotel Granduca in Houston is a member of “The Leading Hotels of the World,” a designation that will be sought for the Hotel Granduca Austin as well. Borlenghi says the long-range goal is to expand the Granduca brand to other markets in Texas and around the nation.
Interfin’s partner in the Austin hotel is Riverside Resources, an Austin-based developer that has developed office and residential properties in the city, including the Whitney high-rise residential tower in downtown. Riverside will develop a seven-story office building adjacent to the Hotel Granduca Austin.
Ralph Bivins, former president of the National Association of Real Estate Editors, is founding editor of RealtyNewsReport.