Forestar to sell Austin hotel
Radisson is being unloaded, along with Bakken energy play.
Austin-based Forestar Group Inc. said Friday that it plans to sell some of its noncore assets, including the Radisson Hotel & Suites in downtown Austin.
The real estate and oil and gas company said its board of directors has approved retaining Eastdil Secured to sell the Radisson, while Tudor, Pickering, Holt & Co. has been hired to market Forestar’s non-core oil and gas assets in the Bakken and Three Forks formations in North Dakota.
“Forestar is focused on creating value through strategic and disciplined investments in our core residential housing business,” Phil Weber, Forestar CEO, said in a written statement. “It is our intention to exit non-core, non-residential housing assets.”
Forestar’s statement noted: “At this time, there can be no assurance regarding the likelihood or timing of a specific transaction or transactions.”
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 is valued at $54 million by the Travis Central Appraisal District.
“It is a trophy property that satisfies the three fundamentals of real estate: location, location, location,” said David Armbrust, a prominent Austin real estate lawyer who has handled some legal matters for Forestar.
Friday’s announcement comes in what has been a tumultuous year for Forestar Group, a company that was spun off from the former Temple-Inland Inc. in 2007.
Forestar agreed to make changes in its operations this 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.
Forestar officials say the company continues to look for apartment-development opportunities in desirable urban and suburban locations in its targeted growth markets, which currently include Austin, Denver, Dallas, Fort Worth, Atlanta, Houston, Nashville and Charlotte.
In Austin, Forestar is in the design stages on a project slated for Pressler Street, which is in the West Fifth Street corridor between North Lamar Boulevard and MoPac Boulevard (Loop 1). A start date has not been announced.
Forestar’s plan to sell off assets also follows a management shakeup in late September, when Jim DeCosmo stepped down as chief executive after nearly nine years in the position, and was replaced by Weber.
In airing their complaints publicly in January, the disgruntled investors — led by investment firms SpringOwl Asset Management of New York and Los Angeles-based Cove Street Capital — said that Forestar “lacks clear and focused strategic direction.” The investors called for Forestar to make changes in its management strategy and in its leadership.
“We believe the inherent flaws in Forestar’s capital allocation and a misguided strategic plan have led to dismal stock performance over the company’s seven years as a standalone public entity,” the investors said in a letter in January addressed to fellow shareholders and filed with the U.S. Securities and Exchange Commission.