New Hotel Project Kicks Off in Downtown San Antonio Amid Real Estate Boom

Exciting Development Unfolds in Downtown San Antonio

San Antonio is buzzing with news as construction has officially kicked off on a new hotel that promises to make its mark in the heart of downtown! Residence Inn by Marriott, a swanky 171-room, 10-story hotel, is coming to life at the corner of North Main Avenue and East Commerce Street, right by the picturesque Main Plaza. With a budget of a cool $58 million and an anticipated grand opening in mid-2026, this hotel is set to join the ongoing lodging boom happening in the area.

Opportunity Zones and Investment Galore

Bringing this project to fruition is Merritt Development Group based in Austin, in collaboration with Atlanta’s Peachtree Group. What makes this development particularly fascinating is its utilization of a Trump-era tax-break that was designed to encourage investment in lower-income communities. With this tax incentive, the developers could rally the needed funds to make this project happen in what some are calling a tricky market for real estate.

Greg Friedman, the managing principal and CEO of Peachtree, shared with an eager audience at the groundbreaking event, “There’s no question, because of the opportunity zone, we were able to bring in the capital to capitalize the equity of this project as well as get that financing in a very challenging market.”

Opportunity Zones Explained

For those scratching their heads about what an opportunity zone is, let’s clear it up! Established during former President Trump’s 2017 tax overhaul, this program opens the door for tax breaks for investors who pour money into long-term investments in economically disadvantaged areas. In San Antonio, several tracts, including much of downtown, have been designated as opportunity zones.

But it hasn’t all been smooth sailing. Critics allege that this program’s benefits often favor luxury projects with few job opportunities and may lack transparency regarding the impact of investments. Nonetheless, some supporters argue that it has successfully attracted investors and created jobs in areas that otherwise might struggle to attract attention.

What’s Next for the Residence Inn?

Once the Residence Inn is completed, guests can look forward to spacious rooms complete with kitchens, separate living areas, and workstations. Not stopping there, the hotel will also boast top-notch amenities including a fitness center, meeting rooms, outdoor gathering spaces, and even a Caribou Coffee location to fuel patrons for their adventures.

Laying down roots in a vibrant and complex downtown area, this hotel is among over 1,800 hotel rooms planned to be finished by the end of 2027. Can you feel the excitement? Recent months have seen a flurry of developments like the upscale 347-room Kimpton Santo and the luxurious 390-room InterContinental Hotel, both sprucing up what’s available in the downtown area.

Demand Still Strong

With at least three hotels in the works north of downtown and the occupancy rates feeling a pinch due to excessive supply and a slower rebound in convention business, one might wonder how the Residence Inn will perform. John Schellhase from Peachtree confidently expressed optimism, stating that the extended-stay concept has gained traction and continuity through the pandemic, making it an attractive option for a variety of guests—from tourists exploring the River Walk to out-of-town employees on work assignments.

He added, “That’s the beauty of why the extended-stay market is so strong nationally. It captures a strong, diversified demand base and is much more resilient across economic cycles.”

A Bright Future Ahead

As excitement builds over the construction of the Residence Inn, San Antonio is embracing a wave of development that aims to enhance the city’s appeal for visitors and residents alike. “We’re excited to be in San Antonio,” Schellhase said. “We’re big believers in San Antonio, not just today, for the long term.” With bright prospects ahead, it looks like San Antonio is ready to welcome new guests into its vibrant heart!