KHP Capital Partners is planning to convert the historic Johnston Building into a 245-room hotel with a fine-dining restaurant and coffee shop on the first floor, a ballroom, conference room and rooftop bar. The building is just over 100 years old. Last year, KHP bought it from Spaulding & Slye Investments for $19.3 million.

Due to the building’s age, KHP hopes to land federal historic tax credits from the National Park Service. Buildings that qualify for federal historic preservation tax credits receive 20% of the rehabilitation’s qualified expenses.

Demolition has begun on the building’s interior, and construction will ramp up this spring. The project is expected to deliver in the summer of 2026.

It’s just the latest office-to-hotel conversion the firm has completed. The Charlotte Business Journal reports that KHP says it’s invested $1.25 billion in renovating existing hotel properties and rehabilitating other obsolete real estate into boutique hotels. Its portfolio includes projects in Philadelphia, Washington, D.C., Chicago and Portland, among others.

KHP Capital Partners has purchased a historic Charlotte building. The company paid $19.3 million for The Johnston Building, a 100-year-old uptown office building. Spaulding & Sly Investments was the seller. The Charlotte Business Journal reports Spaulding & Sly acquired the property from The Dilweg Co. in 2019 for $35.3 million. Mecklenburg County’s 2023 property revaluation appraised the building at $45.4 million.

KHP Capital Partners is a real estate private equity firm focused on investments in lifestyle and independent hotels. Due to its historic status, the Johnston Building will likely quality for tax credits should KHP convert it.

The Johnston Building is a 17-story, 172,300-square-foot office property built in 1924. When it opened, it was the tallest building in Charlotte. The Charlotte-Mecklenburg Historic Landmarks Commission designated it a historic landmark in 1992.

CBRE’s Patrick Gildea, Matt Smith and Robert Hardaway represented the building owner in the transaction. Gildea and Smith were brokers in the 2019 sale.