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New Owners BentleyForbes Hospitality Group Planning a $150 million
 Upgrade and Expansion of The Four Seasons Resort and
 Club Dallas at Las Colinas

By Suzanne Marta, The Dallas Morning NewsMcClatchy-Tribune Business News

Dec. 2, 2006 - The Four Seasons Resort and Club Dallas at Las Colinas is set for a $150 million expansion, the complex's new owners are expected to announce Monday.

In addition to an overhaul of hotel rooms, common areas and the Tournament Players Course, BentleyForbes Hospitality Group LLC plans a new resort-style pool and 40 high-end villas.

The project would also include at least 40 condos, a first for the Las Colinas resort.

The condos could be among the most expensive in the area, priced similarly to upper-end units marketed by the W Dallas Victory Hotel & Residences and the Residences at the Ritz-Carlton, Dallas.

The capital improvement project signals a dramatic shift for Los Angeles-based BentleyForbes, which bought the property three months ago for a reported $200 million and initially pledged $15 million in upgrades.

Competition is intensifying for customers at the highest end of the hotel and condo market, with the recently opened W hotel, and the Ritz-Carlton and Mandarin Oriental both under construction near downtown Dallas.

Even before the Ritz-Carlton and Mandarin Oriental open, there are signals that the market may be feeling the pressure of a surplus of luxury rooms.

Dallas-based Rosewood Hotels & Resorts' The Mansion on Turtle Creek, which was put up for sale earlier this year, has been taken off the market, said Shane Krige, the property's managing director.

Officials from BentleyForbes said they hope to bolster the Four Seasons' footing in the market and among its sister properties.

"We wanted to make this property on par with the absolute best and highest-end Four Seasons that there are," said C. Frederick Wehba II, BentleyForbes' vice chairman.

BentleyForbes plans to start revamping the hotel's common areas and rooms in February. Work on the Tournament Players Course, the new villas and the resort-style pool is set to begin next summer, following the annual EDS Byron Nelson Championship. Upgrades to the hotel's Cottonwood Valley golf course are expected to be done next month.

The condo development highlights one of the Four Seasons' key assets: land. Even with the recent addition of 40 villas and an outdoor amphitheater, the 400-acre property still has about 34 acres of land that could be developed.

The new projects will use 14 acres of that land, with the majority going to the condo development. At least one other 40-unit phase may be added if sales are strong, said David W. Cobb, the company's president and chief executive.

As the price for hotel properties has risen, investors have looked to developing condos to increase revenue, said John Keeling, a lodging analyst with PKF Consulting in Houston.

Research has shown condos associated with top-rated brands such as the Four Seasons command a 15 percent to 25 percent premium over similar units, Mr. Keeling said.

But in Dallas, the hotel condo business has turned particularly brisk, making some real estate experts skeptical that demand is sufficient to absorb them.

"The Four Seasons is fabulous, but gosh, we have a lot of fabulous going on," said Mike Puls, a Dallas-based residential analyst with Foley & Puls. "The question is how fast will they be able to sell at that premium."

Mr. Puls said much of the demand for luxury condos from 2003 to 2005 was fueled by out-of-state buyers looking for a place to invest other than the stock market. Today, many of those would-be buyers have already filled their portfolios with condos and have turned their attention back to stocks, he said.

"The market for condos isn't as strong," Mr. Puls said.

BentleyForbes officials were more bullish, pointing to the Four Seasons' two golf courses and 176,000-square-foot sports club as key amenities that set it apart from other projects.

Plans for the 40 luxury condos are still being developed, but the first phase is expected to offer finished units with views of the Tournament Players Course's 18th hole. Prices may run between $700 and $800 a square foot. Pre-construction sales could begin next summer.

"We think the fundamentals are there," said Mr. Cobb, the company's president and chief executive.

PKF's Mr. Keeling said the Four Seasons has enjoyed a strong position in Las Colinas, largely because it's so close to many of the large corporate headquarters that generate business for luxury hotel guests.

That's not true for the downtown properties, which are expected to face more challenges generating enough customers to fill all the new luxury rooms.

"I really don't think there's enough demand for those four hotels," Mr. Keeling said. "It's going to be bloody. The Four Seasons customer isn't going to come downtown if they don't have to."

Rosewood's Mr. Krige said in an e-mail message that the owners were "exploring opportunities for a strategic renovation either through an outright sale or recapitalization" over the last few months and decided to focus on the renovation project.

"We are now in the final design phases of the renovation," Mr. Krige said, adding that the details would be announced in early 2007 and renovations would "allow The Mansion to continue to distinguish itself as the premier ultra-luxury hotel in Dallas."

Mr. Keeling said the Mansion was put on the market too late and faces more challenges with so much new competition in its backyard.



Copyright (c) 2006, The Dallas Morning News

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