Hotelier Breathing Life Into Historic City Sites

Tran Group Is Turning Empty Downtown Buildings Into Price-conscious Destinations

August 14, 2009|By Edward Gunts | Edward Gunts,ed.gunts@baltsun.com

Two years ago, La Tran had never been to Baltimore. If all goes according to plan, his family business will be one of the biggest hotel operators in the city by 2011.

Tran is a member of a family business that earlier this year opened the $11 million, 96-room Quality Inn Downtown Baltimore inside the old Title Building at 110 St. Paul Place.

His family's company, Tran Group LLC, is nearing completion on a second project nearby, conversion of the historic Hotel Junker at 22 E. Fayette Street to an $8 million, 49-room Envy Hotel by Best Western.

The Tran Group also recently acquired three buildings at the southeast corner of Charles and Redwood streets and plans to transform them by 2011 to a $20 million, 273-room "Hilton II" hotel.

When all three are completed, the Tran Group will have invested $39 million to build 418 hotel rooms within a few blocks of each other, an impressive entry to the Baltimore market.

In each case, the company followed the same strategy: buying historic buildings that most recently were used as office space and giving them new lives as affordable hotels for business and leisure travelers. And it has done so in a market where more than a dozen other hotels are under construction or planned.

The Tran Group's buildings weren't considered first-class office space, but they are well-located for travelers who want to stay downtown, they're handsome, and they lend themselves to hotel conversion. Tran said his family immediately saw potential in buying them and fixing them up.

"Where other people see a negative," he said, "we see a positive."

The Tran Group is based in New York, where it has 1,930 hotel rooms, and a portfolio that also includes hotel properties in Washington and Philadelphia. The Quality Inn, which opened last spring, was its first venture in Baltimore.

Tran said Baltimore is an attractive market for investment because the city has a large stock of distinctive buildings and real estate prices are "very reasonable." He said his family can convert an older office building to a hotel in Baltimore for $100,000 to $125,000 per room, compared with $500,000 or more in New York City. That enables the company to charge relatively low rates for its rooms - $79.99 to $109.99 for the Quality Inn and roughly the same for the soon-to-open Best Western.

Tran said his family "self finances" its smaller projects by using proceeds from existing hotels, rather than borrowing from lenders. After a building opens, he said, it may put a mortgage on the property, giving it money for the next project. For larger projects such as the Hilton, it needs to line up financing at the outset.

Tran said the key to the company's success has been offering attractive, well-located hotel rooms at affordable rates that help draw value-conscious travelers.

"Even though there are a lot of hotels under construction or planned, we see that the kind of hotel we offer is ... different from other hotels," he said. "If we have something that is unique to offer the people who come to Baltimore, at an attractive price, we're definitely going to have a success."

Designed by Kann Partners of Baltimore, the hotels are full of amenities not always seen in affordable hotels. The Quality Inn's guest rooms features flat screen TVs, heavy draperies and queen- or king-sized beds. The room price includes breakfast. The Tran Group just received a liquor license for the inn and is building a pub on the first floor.

The Best Western will have a business center and exercise area. Opening this fall, it will be the first in a new line that the Tran Group is introducing in Baltimore, the "Envy Hotels."

The Redwood Street conversion is the most elaborate of the three. The Tran Group plans to recycle the buildings at 15 and 19 S. Charles St. and raze the building at 17 S. Charles to construct a slightly taller infill building that will connect all three properties. Nightly rates are expected to range from $129 to $189.

Born 53 years ago in Nha Trang, Vietnam, La Dinh Tran was a paratrooper for the South Vietnamese army during the Vietnam War and was trained by U. S. soldiers. He emigrated to the U.S. in 1975.

Today, Tran said, different members of his family take on various roles in the company. One nephew, Sonny Tran, focuses on acquiring buildings. Two more nephews, Henry and Roy, oversee construction and maintenance. Along with Henry's wife, Katie, La Tran is in charge of operating the Baltimore properties.

Once the Redwood Street hotel opens, Tran said, his company probably won't build any more hotels in Baltimore. But it does have other ideas for downtown. The Tran Group acquired 102-104 St. Paul Place for offices. Members are eying another building for a condominium conversion. They plan to continue upgrading Courthouse Plaza, the park in front of the Quality Inn.

In recognition of the family's contributions, the Downtown Partnership of Baltimore is giving the Tran Group an award at its annual meeting next month. Partnership president Kirby Fowler said his organization likes to recognize groups that help enliven downtown, and the Tran Group's improvements to the St. Paul Place building and Courthouse Plaza have done just that.

Before the Tran Group opened its hotel, almost the entire building face along Courthouse Plaza was vacant, Fowler said. "It's encouraging to see the plaza come back to life, particularly at night and on weekends."

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