Last week I came across two pieces of information which suggest that Starwood Capital’s 1 Hotel Washington DC may start construction sooner than expected.

Through many sources, (and the fact that no construction has occurred) it seems as though Starwood Capital has held back any further development of all of their Baccarat & 1 Hotel properties, while putting on indefinte hold the development of the Crillon Hotel brand due to the difficulty in getting credit in todays economy. Because of this, it was expected that no activity would occur until 2009 at the earliest for any of the four 1 Hotel sites listed on their website (NYC, Washington DC, Scottsdale, Seattle).

I came across a post from a blog called DC Metrocentric which showed demolition activity (photos below) on the 1 Hotel Washington site occurring in late November. The building which was on the site housed the Nigerian Embassy was being torn down to make room for the 1 Hotel. Proof that the site was still to be a 1 Hotel can be seen by the signs which wrap the fence along the property as well as used to hang down from the top of the building.

Just tearing down a building isn’t a sure sign of the beginning of construction – the building might have been unsafe in its current condition, it may save Starwood Capital taxes if they remove the building from the site (so they only pay taxes on the land, not the land + improvements), or since the building is to be torn down anyway, it may have been to provide jobs (even if temporarily) to construciton workers in the area who are hurting because of the economic slowdown.

But then I took a look at Perseus Realty’s website  – www.perseusrealty.com – which showed the 1 Hotel as one of their “Current Projects”, where previously it had been categorized as a development project, and they also updated the image of the hotel. For the first time that I have seen, an image of the entire hotel building was posted on their site, compared to only one visible corner in the previous image which was sent out with press materials.

1 Hotel Washington DC

So does this mean that construction will start soon on the 1 Hotel Washington DC? That still remains to be seen, but its obvious that the development of this project - along with other 1 Hotels is continuing, perhaps sooner than we expected.

Like always – I’ll keep an eye on the project and report back here anytime I find out more.

andrew@alconic-inc.com

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