Hilton Garden Inn to rise in LR, joining downtown’s room boom

Hotel developers show no signs of getting their fill of downtown Little Rock.

Little Rock-based Pinnacle Hotel Group will build a 135-room, seven-story Hilton Garden Inn, the fifth new hostelry in that area.

Construction will begin in about a year, with completion in early 2016, Shawn Govind, the group’s director of development, said Monday.

It will be the fifth hotel built in downtown since 2004.

“Research shows that there’s still room to expand,” Govind said.

The Pinnacle Hotel Group is in the process of buying land on the southern end of a block whose boundaries are Third, Fourth, Rock and Cumberland streets.

Its proximity to NorthLittle Rock, Interstate 30, the Bill and Hillary Clinton National Airport, and the River Market District, as well as the renaissance of Main Street, helped the group make its decision.

With the other hotels within a few blocks, there will be the opportunity to use overflow from other hotels. And Pinnacle will partner to bring in larger convention groups, Govind said.

Pinnacle joins the Mc-Kibbon Hotel Group Inc. of Gainsville, Ga., in developing the downtown hotel market. McKibbon will soon build its fourth in that area, a 115-room Hilton Homewood Suites on land formerly occupied by the Arkla Gas Co. building, which is being razed. The others are the Marriott Courtyard on President Clinton Avenue, and the Hampton Inn and Suites and the Residence Inn by Marriott, both of which are on River Market Avenue.

McKibbon has about 60 properties across the southeastern United States.

Pinnacle has signed an agreement with Hilton and will close Thursday with the owners of the Rock Street Shops, Grace Properties LLC and Walthour-Flake Co. Inc., said Mason Lewis of Colliers International, the listing agent.

Closing on a parking lot now operated by Best Park and owned by River Market South LLC, a Moses Tucker partnership, will be no later than Jan. 16, Lewis said.

Sharon Priest, executive director of the Little Rock Downtown Partnership, said that a few years ago developers looking for property to build a hotel on were focused on the River Market District.

At that time, the location of the latest hotel was “too far” away from the district, Priest said.

“Obviously, we’re a hot market now,” Priest said.

A report by Smith Travel Research on downtown Little Rock hotels says the overall occupancy rate is 70 percent, said John Mayner, director of communications for the Little Rock Convention and Visitors Bureau.

Michael “Doc” Terry, a University of Central Florida real estate professor who specializes in hotels, said investors obviously look at the market’s occupancy rate and performance of comparable hotels.

The Hilton Garden Inns is a “very good brand” that will help it gain a foothold in the market, Terry said. Initially, it may not quite match the occupancy rates in the market and will face the challenge of gaining market share in the next few years, Terry said.

After a few years, if it’s “south of 60” percent and the overall market is not growing, “you know you’ve overbuilt,” he said.

Pinnacle’s history has been in small hotels. The partners in the group - Chet Patel, Rocky Govind and Nick Nagin - come from a family background of running small hotels, Shawn Govind said. The Govinds are cousins.

The group expects to open a 98-room Marriott Courtyard in Hot Springs in January 2015. It plans to open a 97-room Holiday Inn and Suites in Russellville and an 85-room Holiday Inn Express in Bryant in about a year.

Its portfolio includes a 119-room Holiday Inn in west Little Rock, a 50-room Comfort Inn in Little Rock, a Comfort Inn in North Little Rock, an America’s Best Value Inn and Suites in Little Rock, a Comfort Inn and Suites in Fayetteville and a Quality Inn and Suites in Clarksville.

Front Section, Pages 1 on 12/03/2013

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