Feb. 08–Austin-based Forestar Group Inc. said Monday that it has agreed to sell the Radisson Hotel & Suites in downtown Austin in a $130 million deal.
The Radisson is at 111 E. Cesar Chavez St. and overlooks Lady Bird Lake and the Ann W. Richards Congress Avenue Bridge. The hotel has undergone more than $20 million in renovations since 2013, including the rooms, pool, meeting rooms, ballroom and restaurant. The hotel's appraised value is $54 million, according to the Travis Central Appraisal District.
Forestar Group is selling the hotel through a subsidiary, the Capitol of Texas Insurance Group Inc. The buyer is Austin Lakeside Hotel Owner LLC, according to a Forestar Group news release.
Austin Lakeside Hotel Owner LLC is a newly created limited liability company, with its formation documents filed with the Texas Secretary of State's office on Feb. 5. Those documents list a New York address for the company, but do not include additional information about the company's ownership.
The sale is an all-cash deal and is expected to close in the second quarter, Forestar Group said in a news release. Austin Lakeside has made a $5 million earnest money payment, according to the news release.
Forestar Group, an real estate and oil and gas company, said in November that it was exploring the sale of some of its non-core assets, including the Radisson Hotel & Suites. The company said at the time that it had hired Eastdil Secured to sell the Radisson, while Tudor, Pickering, Holt & Co. had been hired to market Forestar's non-core oil and gas assets in the Bakken and Three Forks formations in North Dakota.
At that time, David Armbrust, an Austin real estate lawyer who has handled some legal matters for Forestar, described the Radisson as "a trophy property that satisfies the three fundamentals of real estate: location, location, location. "
Forestar agreed to make changes in its operations last year, following criticism from a group of shareholders frustrated with their investments in the company.
Forestar subsequently said it would focus on growing its core real estate business — residential housing development — where multifamily development plays a key role.
In late September, Jim DeCosmo stepped down as chief executive after nearly nine years in the position and was replaced by Phil Weber.
In its fiscal third quarter, Forestar Group said its revenue dropped almost 27 percent. Plagued by the sustained, sharp drop in oil and gas prices, Forestar said its energy interests led the drag on profit during the quarter. All told, the company reported a loss of $164.2 million, or $4.79 per share, for the quarter.
Forestar Group's shares closed Monday up 16 cents, or 1.8 percent, at $8.84.
