14th and Wyandotte Tower

[normalthings]

Bravicci LLC purchased the empty lot south of the Crown Plaza and the surface lot west of the KC Power and Light Building this summer. It appears they plan on building a new hotel.

Per Securities and Exchange Commission documents relating to a loan Bravicci (borrower) took out in June.

The Loan proceeds will be used by the Borrower to fund the acquisition of an operating parking lot facility located in Kansas City, Missouri (the “Property”) in order to build a hotel on a nearby land parcel.

The LLC took out a high interest, short term note for the property indicating to me their plan/desire to start construction sooner rather than later. They aren't just going to sit on this.

(LOAN) DATE: June 28, 2019
PRINCIPAL AMOUNT: $4,840,000.00
INITIAL INTEREST RATE: 11.00%

“Due Date” means the earlier of Acceleration, or June 28, 2020;

More Information on Bravicci LLC:
Registered Agent: Desai, Dilip
Address: 8551 E Blue Pkwy Kansas City, MO 64133 (address of a Holiday Inn Express)
Date Formed: 6/3/2019

[FangKC]

I am concerned too many hotel rooms are being built -- faster than the market can demonstrate absorption. I worry this will end up hurting some of the older subsidized hotel properties like the Aladdin, The President, the Savoy, and the Phillips hotels. Keep in mind that Cordish plans to build another new hotel down the block; the Hotel Bravo on Wyandotte); the Place Clothing Co. and Scarritt buildings are being converted to hotels; the Hyatt House on Broadway; and of course there is the former Federal Reserve building hotel project. All this and the Loew's will be hitting the market soon.

I would be less concerned if downtown was drawing in a lot of companies to new office projects that would attract business travelers.

[TheLastGentleman]

Glad something’s in the works for the historic surface lot next to the p&l building

[KCPowercat]

Fang the savoy opened last year. They are part of the new glut you are concerned about.

I think it shakes itself out. Hoteliers and the investors are generally savvy. Definitely no need to subsidize them any longer.

[grecobs]

Agree there is a massive supply side issue on the horizon. There simply aren’t enough condos or office buildings being built. We need more people and more workers downtown.

[normalthings]

Agree there is a massive supply side issue on the horizon. There simply aren’t enough condos or office buildings being built. We need more people and more workers downtown.

We had a massive shortage and still continue to lag peer cities.

[earthling]

About 10 years ago downtown KC only had something like 3500 rooms IIRC compared to 7K-10K with peers, certainly 15 years ago. How many rooms approaching now? I'm thinking maybe 7K-8K. KC metro has about 30K-35K rooms, which is quite a bit but we'll probably see the inventory continue to shift more towards the city and airport as outdated hotels retire like this one in OP.

The city should be more careful about subsidizing hotels at this point but can reduce the risk if a hotel/residential combo. Hotels from this point should also be designed with conversion to micro residential units in mind for future if it fails as a hotel.

[normalthings]

About 10 years ago downtown KC only had something like 3500 rooms IIRC compared to 7K-10K with peers, certainly 15 years ago. How many rooms approaching now? I'm thinking maybe 7K-8K. KC metro has about 30K-35K rooms, which is quite a bit but we'll probably see the inventory continue to shift more towards the city and airport as outdated hotels retire like this one in OP.

The city should be more careful about subsidizing hotels at this point but can reduce the risk if a hotel/residential combo. Hotels from this point should also be designed with conversion to micro residential units in mind for future if it fails as a hotel.

We retired some downtown capacity as well so my guess would be in the 6-7K range plus new projects in the works.

[earthling]

The Star had an article about concern KC being overbuilt back in April...
https://www.kansascity.com/news/local/a ... 35804.html

Indeed, there are signs that Kansas City’s hotel market has strengthened over the last several years. In 2007, Kansas City’s occupancy rate was 60.2%. The average daily rate for a hotel room was $96. The market peaked in 2017 when the occupancy rate reached 67.2% and the average daily rate grew to $116.64.

It says 72% occupancy is considered healthy but I've seen maintaining 60% avg occupancy is considered well functioning IIRC.

The article also shows only about 15K rooms, which isn't clear if they mean metro or KCMO, I'm assuming the latter because many other sources (including from Collison) show over 30K for KC metro.

[normalthings]

The Star had an article about concern KC being overbuilt back in April...
https://www.kansascity.com/news/local/a ... 35804.html

Indeed, there are signs that Kansas City’s hotel market has strengthened over the last several years. In 2007, Kansas City’s occupancy rate was 60.2%. The average daily rate for a hotel room was $96. The market peaked in 2017 when the occupancy rate reached 67.2% and the average daily rate grew to $116.64.

It says 72% occupancy is considered healthy but I've seen maintaining 60% avg occupancy is considered well functioning IIRC.

The article also shows only about 15K rooms, which isn't clear if they mean metro or KCMO, I'm assuming the latter because many other sources (including from Collison) show over 30K for KC metro.

I’m not a hospitality expert but worked on a large project very recently that allowed me to see a lot of the KC hospitality data.

Occupancy rates have been and continue to steadily increase when looking at the decade overall. 2017 rates reached the levels it did due to a number of 1 time events. 2018 rates beat 2016 and 2019 is on track to beat 2018.

Once you look into the numbers and trends, it’s clear to see the KC Star was telling half truths. This is why developers and investors(people who looks at the full fact book) continue to propose and build more hotels.

[DaveKCMO]

I am not at all concerned about too many hotels being built. If we do go beyond equilibrium, prices will drop and lesser properties might fail or convert to some other use. There are no hotels "too big to fail", including the downtown Marriott.

[GRID]

When I visit KC, I (or we) will often stay in hotels for portions of my stays. 10-15 years ago, downtown inventory was very dated and just not all that great. It was also pretty cheap (it was more expensive to stay in Overland Park). Even places like the Westin were cheap. I would always price hotels near KCI etc too for early flights and when doing that, I would also check prices across the metro area. Once in a while I would stay in the eastern suburbs as well. I have stayed in most of the nicer hotels in metro KC (none on the KS side though, I avoid the KS side and rarely even visit the KS side when in town).

It's been pretty interesting watching the market change over the years.

Downtown is now by far the most expensive place to stay in metro KC and you have a lot more choices. All of JoCo is dirt cheap now with maybe the exception of that new Embassy Suites in Olathe. KCI and the eastern suburbs are also cheaper. But even though downtown has added a lot of new inventory, the rates are much higher and keep climbing. It seems like the new downtown hotels are feeding off each other and creating a new market (much like residential is doing now) and I think a lot of the traveling business community is noticing and preferring downtown hotels over suburban ones now.

Some of the more recent hotels I have stayed in include the Crossroads, the new Marriott and the new Hamton Ins etc. The new Loews, Embassy Suites, Hyatt House etc will only grow the market more and if the office markets picks up like it looks like it is about to, then you will see a lot more hotels still. Just looking at what's going on in other cities, I think you will see robust hotel construction continue for a while.

[DaveKCMO]

People just really can't wrap their heads around the fact that downtown is now a destination worthy of a thriving hotel market, even without significant convention growth.

[flyingember]

People just really can't wrap their heads around the fact that downtown is now a destination worthy of a thriving hotel market, even without significant convention growth.

It's worth reiterating there's space for more than 100,000 people at downtown events at once so if we want significant convention growth we need tens thousands of new hotel rooms. Just the largest Bartle Hall space can hold up to 38,000 people.

People also can't wrap their heads around how overbuilt we are for conventions.

[earthling]

A major milestone downtown KC has reached is ability to build hotels with little to no parking needed as part of project, thanks partly due to Uber and streetcar.

I wonder about what % of downtown hotel visitors have a purpose of visit outside downtown/city core. And do hotels run shuttles to sports complex?

[normalthings]

A major milestone downtown KC has reached is ability to build hotels with little to no parking needed as part of project, thanks partly due to Uber and streetcar.

and scooters

[normalthings]

[TheLastGentleman]

Does this mean it's going to stay a surface lot, or....?

[normalthings]

Does this mean it's going to stay a surface lot, or....?

A bigger surface lot*

[FangKC]

I wonder if they are planning to build the hotel up against the Crown Plaza where the old garage was recently demolished.

https://www.google.com/maps/@39.0960276 ... !1e3?hl=en