Manchester Firm Obtains Financing for Austin Hotel

Manchester Texas Financial Group has secured financing to build a 1,066-room convention hotel in Austin, clearing the way for construction to begin next month on the $370 million project.

Los Angeles-based Colony Capital will be providing financing for the new hotel, which, at 595 feet tall, is slated to be the second-tallest structure in downtown Austin. Manchester Texas Financial is a subsidiary of Manchester Financial Group, which is U-T San Diego Publisher “Papa” Doug Manchester’s San Diego-based development firm.

The planned Fairmont Austin, expected to open by June 2017, will be the first to have direct access to the Austin Convention Center, made possible via an aerial promenade. The hotel’s architect, Gensler, noted that the building was designed to be highly sustainable, incorporating an energy-efficient exterior “skin”’ and building materials.

Austin, particularly the downtown area, is poised for significant growth. A number of other hotels are already under construction, including the 1,012-room JW Marriott convention hotel, a Westin hotel and the 16-story Hotel Van Zandt, a project being developed by JMI Realty, the real estate arm of former Padres owner John Moores.

“We are extremely bullish as to our 1,066-room hotel providing the critical mass of convention center hotel rooms to accommodate the growing demand for citywide conventions,” said Manchester.

The combined equity contribution of the developer and the financing from Colony Capital will allow construction to get under way Nov. 3. Colony is a private international investment firm that has made investments in some 4,300 hotels in more than 100 countries. Overseeing the Austin project is Manchester’s son, Douglas W. Manchester.

“Having had the privilege of working with both ‘Papa’ Doug Manchester and the Manchester Group for over a decade, we see this as a continuation of a great and valued relationship,” Thomas J. Barrack Jr., CEO and founder of Colony Capital, said in a prepared statement. “We are looking forward to yet again working with ‘Papa’ Doug, his son Doug and Fairmont in the dynamic, growing city of Austin.”

Manchester, who has extensive experience in hotel development, is responsible for both the San Diego Marriott Marquis & Marina and the Manchester Grand Hyatt in downtown San Diego, which are now owned by Host Hotels & Resorts. Manchester currently owns the Grand Del Mar.

The Fairmont Austin, beyond its nearly 1,066 rooms, will feature more than 106,000 square feet of meeting space, a 19,000-square-foot outdoor deck, and four levels of parking totaling nearly 1.4 million square feet.

Earlier this year, Hunt Construction Group, which also built the San Diego Marriott, was awarded a $247 million contract to build the Austin hotel.