Home2 Suites continues growth with Texas project

Left to right: Wayne Newton, SVP, Magnolia Lodging; Jim Grandy, president, Frisco Economic Development Corp.; Michael Buta, VP of operations, Magnolia Lodging; Matthew Newton, president, Magnolia Lodging; Frisco Mayor Maher Maso; Jay Shinn, CEO Magnolia Lodging; Dawn Koenig, VP of brand performance support, Home2 Suites; Sarah Newton, purchasing, Magnolia Lodging; Melanie Carroll, VP for development, Children’s Advocacy Center of Collin County; and Tony Felker, president, Frisco Chamber of Commerce.

FRISCO, Texas–Magnolia Lodging Development broke ground on a new Home2 Suites by Hilton hotel in Frisco, Texas, with plans to open in mid-2012.

“We already have a Homewood Suites in Frisco, so we were familiar with the market,” said Matthew Newton, SVP of Magnolia. “Looking at extended-stay demand, we thought Frisco would be a good fit for the Home2. It was a high-profile site and we felt like we got a good price.”

Home2 Suites has nine other hotels under construction, 40 in development and more than 50 hotels in the pipeline. The 127-room Home2 Suites is owned by Shinn Stonebriar Hospitality, which hopes to capitalize on the expanding extended-stay market in Frisco.

“Frisco is a growing area and the city has been aggressive in recruiting new companies with economic incentive packages,” Newton said. “When the city has business headquarters and medium-sized companies growing fast, there is growth.”

A close relationship with Hilton Hotels Corp. encouraged Magnolia to develop the property.

“We really like Home2, and we’d rather be the one to build now and reap the benefits later,” Newton said. “Our company has bought assets before and right now it seems like a lot of the better assets still have a lot of competition. A lot of [real estate investment trusts] are willing to pay more than others. Now is a good time to build versus buy.”

Low construction costs were also important to finding financing for development.

“Part of our incentive for building is hoping that when things take off again, construction costs will climb significantly,” Newton said. “Construction prices aren’t down and raw materials are still a little expensive, but we feel there’s potential as the economy improves.”