LA investor plans $40M resi conversion of Houston Galleria hotel

Hotel-to-resi accounts for nearly 6 in 10 conversions in Houston

FEB 9, 2024, 6:09 PM By Brandon Sams

A Los Angeles-based developer is giving new life to a shuttered Hilton Hotel in Houston. 

Bryan Kang’s Dos Lagos Asset filed documents detailing plans for adaptive reuse of the former 292-room Hilton Houston Galleria at 6780 Southwest Freeway. A multifamily complex is planned, but the number of units wasn’t included in the filing.

Conversion of the 200,000-square-foot, 13-story building has an estimated cost of $40 million.  Dallas-based design firm Huitt Zollars is attached to the project. Construction is expected to start in April, with an estimated completion date in September 2025.

Kang was commissioner of the Los Angeles Department of Transportation from 2012 to 2014 but has since turned to the world of real estate. 

In 2019, he purchased an office building in Orange County for $13.4 million, according to Traded LA. Before joining politics and real estate, Kang was the CEO of the wholesale merchandiser Rhapsody Clothing, which sold to stores across North America, as well as South Korean retailer Home Plus. Rhapsody Clothing closed in 2019, according to California business records. Attempts to reach Kang were unsuccessful. 

Originally constructed in 1978 and remodeled in 2016, the Hilton Houston Galleria has been vacant since its lender foreclosed on the property in 2022. The hotel had closed because of the pandemic. It remains real estate-owned, according to the Harris County Appraisal District. Its 2023 assessed value was $7.2 million. 

Hotel-to-resi conversions are a burgeoning business in Houston’s commercial real estate scene. As the Bayou City’s hospitality market has seen deflation post-pandemic, as depressed occupancy rates and loan delinquencies shake the market. Trepp ranked Houston’s hotel market as the nation’s worst last year. 

While office-to-resi conversions make the headlines, hotel-to-resi reuse developments comprise 58 percent of Houston’s conversion market, according to RentCafe. 

The Houston Housing Authority, in collaboration with Columbia Residential, is converting a dilapidated Holiday Inn at 2100 Memorial Drive, long an eyesore near Buffalo Bayou, into an affordable 197-unit senior living complex. 

Hotel-to-resi developer Shir Capital acquired the defunct Wyndham Hotel at 14703 Park Row in 2022. It is planning to open Teak Living, a rental community, by the end of this quarter. 

Hotel Conversion to Multifamily in Colorado Springs Brings Needed Affordable Housing

Redevelopment of the Year for Colorado Springs

By Drew Voros

March 31, 2023 | 5:30 AM
SHIR Capital identified the former Hotel Elegante in Colorado Springs, now ALTA Living,
as a candidate for conversion to multifamily, an ambitious plan that earned it CoStar’s
2023 Impact Award for best redevelopment.

A panel of local judges familiar with Colorado Springs’ real estate industry chose the project because of its purpose and large scale. Hotel Elegante had 496 hotel rooms and more than 60,000 square feet of amenity space, making it the third-largest hotel in the state during its heyday. Its transformation into apartments qualifies as one of the largest hotel to multifamily conversion projects in the U.S.Most importantly, the conversion will deliver an affordable housing option to the Colorado Springs market that has seen record rent increases, and should cater to the large military presence in nearby Fort Carson.

About the project: SHIR partnered with The Valcap Group to design and carry out the conversion. To date, 200 units from the former Hotel Elegante have been upgraded,providing 501 affordable housing units.

What the judges said: “This is good affordable housing option to support the military and market needs of southern Colorado Springs,” said Austin Wilson-Bradley, economic and community development manager for the Downtown Partnership of Colorado Springs.”ALTA achieves many community goals such as adaptive reuse and infill as well as increasing the supply of multifamily housing with a goal towards affordability,” added Paul Morrow, a senior analyst with city of Colorado Springs’ community development department.

Who made it happen: Elan Gordon, principal of SHIR Capital, and Richard Fishman,president and founder of Valcap Group, along with Zachary Streit, founder and managing partner of Los Angeles-based WAY Capital.

CoStar’s Impact Awards highlight the commercial real estate transactions and
projects that have transformed their markets over the past year. The winners are
chosen by independent panels of industry professionals who work in the markets
they judge. Learn more about the awards here.