Weeks after purchasing the debt on Hotel Icon, former NBA star Earvin ‘Magic’ Johnson’s Canyon-Johnson Urban Funds and Centurion Partners has taken ownership of the property through a consensual foreclosure process. The team will take several steps in the coming months to stabilize business operations of this iconic and historic asset that has been a fixture in Houston since 1911.
Magic Johnson - Image by Neal Preston/Corbis
“Houston is exactly the type of dense, diverse, urban market where our fund invests,” says Johnson. “Houston is a great city, and we believe our repositioning plans will benefit the surrounding community both by re-energizing Hotel Icon and helping to support more than 100 jobs at this incredible property.”
In November, Canyon and Centurion acquired both the senior and the junior loans on Hotel Icon and immediately initiated a consensual foreclosure that concluded at an auction on the morning of Tuesday, January 4.
The team has finalized the hotel’s repositioning plan, which calls for property improvements including upgrades to the hotel’s 135 guest rooms, enhanced TV and technology systems, and other cosmetic improvements. The joint venture will also execute a management or franchise agreement with a major luxury national hotel chain to re-brand the hotel and implement an effective reservation system and loyalty program.
Both the property upgrades and new major hotel affiliation are expected to be finalized in the next six months. Until then, Destination Hotels and Resorts will continue to manage the hotel.
The Hotel Icon transaction comes on the heels of an expansion of Canyon’s hotel lending and acquisition activities across the country. The firm is intensifying its investments in the hospitality space through equity infusions and debt financing with a focus on complex transactions that require the depth of expertise the Canyon team brings to the table. Canyon has an extensive track record in the hospitality market, with a diverse portfolio that currently includes the Washington Hilton, Hotel 71 in Chicago, and the W Austin Hotel and Residences.
“We are coming across many excellent hotel assets and repositioning opportunities that are in need of recapitalization,” says Canyon Managing Director Richard Bosworth. “In the case of Hotel Icon, the underlying asset is perfectly capable of successfully performing in today’s economic climate with the right capital structure. We are thrilled to partner with Centurion, a firm that has extensive experience in redeveloping and repositioning luxury hotels, to maximize the potential of this incredible property.”
Hotel Icon consists of 135 guestrooms including nine different custom-appointed suites with spacious tiled bathrooms, rain showers, Jacuzzis and antique claw-foot bathtubs. The lobby level restaurant renovation in 2008 resulted in the award-winning VOICE Restaurant and Lounge. Additional amenities include a state-of-the-art fitness facility and full-service Balance Day Spa, as well as a three-level parking garage with 117 stalls operated as secure, covered valet parking for guests. Hotel Icon also features 7,750 square feet of unique event space, including a 2,263 square-foot ballroom and private wine cellar.