In the first investment from its new $100 million real estate fund, NewcrestImage has acquired the Magnolia Hotel in downtown Dallas from Stout Street Hospitality.
The 325-room, 29-floor property opened in 1922 as the headquarters office for Magnolia Petroleum. It was the city’s first skyscraper and the first high-rise in the U.S. to have air conditioning, the company reports. The site, listed on the National Register of Historic Places, opened as a luxury boutique hotel in 1999.
“Historic buildings are an important part of our company history—in fact, the Magnolia will be our 10th historic renovation hotel project,” Mehul Patel, chairman/CEO of NewcrestImage, told Hotel Business. “Over the past 20 years, it’s become a passion—and a privilege—for NewcrestImage to create hotels that blend the glamour of yesterday with the cool of today. The result is a collection of historic and hip hotels in prime locations such as the French Quarter in New Orleans and the central downtown districts of Houston, Amarillo and Dallas. We’re especially proud and excited about the Magnolia acquisition because it’s a very special opportunity in our hometown to polish an iconic gem into a bright new jewel—with a special focus on the Pegasus theme and sculpture that is such a well-known symbol for the Magnolia and for Dallas.”
The hotel is located on Commerce St. across from the 37-floor world headquarters of AT&T and the $100-million AT&T Discovery District, which is a destination for shopping, dining and entertainment.
According to Patel, various luxury rebranding options are being considered for the Magnolia Hotel. “One of our company’s core missions is to make every hotel experience exceptional and memorable for guests,” he said. “At this property, we’ll do that by repositioning the hotel as one of the premier five-star luxury destinations in Texas and the South. We will focus on being unique in four areas of service—wellness, food and beverage, technology and entertainment. We’ll be ‘the’ place to come for a staycation, where everything you could want is at your fingertips. The new hotel will send a love letter to history and an e-mail to the future, all at the same time.”
Current features of the property include 115 suites with seating areas and full kitchens; 24-hour fitness and business centers; a library; a restaurant; two lounges; seven elevators; and 11 meeting rooms that range from 230 sq. ft. to 3,500 sq. ft.
One of the Magnolia Hotel’s special traditions is offering complimentary bedtime milk and house-made cookies every evening between 8 p.m. and 10 p.m.—a service that is suspended currently due to COVID, but is expected to return as soon as conditions are safe.
Another enduring hotel highlight is Pegasus, the winged horse from Greek mythology, that appears in portions of the interior decor, notably in artwork and in engravings on the original elevator doors. This symbol first appeared on the roof of the building in 1934 as a 35-ft. by 40-ft. highly visible rotating red neon sign to welcome attendees for the American Petroleum Institute’s annual convention.
The rooftop winged horse quickly became a signature landmark for the hotel and even for the city, and it eventually grew into one of the world’s most recognized logos, serving as the trademark for Mobil Oil when that company merged with Magnolia Petroleum in 1959.
“I’m confident that NewcrestImage will find ways to make Pegasus even more meaningful, even more memorable for this property and for the community,” added Patel. “We are a company that develops hotels, but we also conserve and preserve historic buildings.”
Patel said that the real estate fund, which was created in early January and quickly attracted about $25 million and raising approximately $5 million a month, was launched for two reasons. “First, our team has a proven track record of success with about 150 hotel assets, both in building from the ground up and in buying and repositioning. We know how to buy it, fix it, operate it and perhaps eventually, sell it. The second reason behind our fund is that the pandemic has created a lot of acquisition situations. I’m not being insensitive—simply realistic—when I say that the problems of some owners have created buying opportunities for investors.”
He continued, “For our NewcrestImage fund, this means aggressively but responsibly looking for appropriate hotel properties nationwide, especially in the lifestyle select-service and the extended-stay segments. Especially well-positioned and well-respected properties of 100-300 rooms, and especially brands in the Hilton, Hyatt, IHG and Marriott families.”