Since that time it appears B.R Guest has taken a step back from the property as the restaurant has been renamed “Beachwood BBQ & Grill” instead of B.R Guest’s Wildwood BBQ & Grill that it was originally named as, there is almost no mention of Postcard Inn on B.R Guest’s website except for an RFP page that is pretty hidden and it is listed on Hersha Hospitality Management’s website as one of their managed properties.

I came across an article in the Miami Herald that talked about the Holiday Isle resort property, located in the Florida Keys, that was foreclosed upon by Starwood Capital in 2009. Starwood in conjunction with Hersha Hospitality Management put the property under a $10 million renovation over the summer and has finished the first part of the renovation – renaming it Postcard Inn Beach Resort and Marina, including opening a Shula’s burger (oddly – not a B.R Guest restaurant) and keeping it in the same design class as the original Postcard Inn in St Pete’s beach, including the lower price point.

From the tone of the article as well as the content of the website – the renovation is not 100% completed yet, hence the quiet release of the website and new brand name, but according to the article the new hotel will “open” in December 2011.

So could this be a new Starwood Capital brand that has slipped in under the radar? Can this brand be replicated in non-beachy locations? We’ll have to see, but it’s an interesting development to see another Postcard Inn.

andrew@alconic-inc.com

This is exciting because there will finally be some action on what is one of the few remaining wholly owned hotel properties by Starwood Hotels. (Starwood has been ridding themselves of owned properties and focusing on franchising and management). The original plans from 2007 called for an Element, Aloft and a Four Points hotel to be built on the property. It was thought that the Westin would be converted to an Element, the Clarion would be torn down and replaced with an Aloft and the Four Points. In that time frame we’ve seen the Westin stay as-is and the Clarion renew their franchise agreement. Starting on July 26th, 2011, the Clarion property will permanently close and construction will commence a few weeks later for a complete renovation and conversion into an Aloft hotel, without tearing down the building and starting from scratch.

And that’s only the first phase of the project:

I found a story in the San Mateo Daily Journal which details that the second phase will consist of a 160 room Element hotel on the property next to the aloft. The Daily Journal article also shed some light into Starwood’s original 2007 plans for the property; the Clarion was to be torn down and replaced by three hotels – an Element, Aloft and Four Points, leaving the Westin alone.

Not only that but in the Millbrae, CA Planning Commission’s Meeting Minutes are extensive discussions about the size of the signs for both an Aloft and Element.

So how will Starwood fit two hotels into a piece of land that currently holds one hotel? The Clarion included banquet hall space, and had a very large backyard/pool area. I can see the banquet space and perhaps even part of the existing hotel near the main entrance getting demolished and the pool/outside area to be shared by the Element and Aloft – much like Starwood’s Aloft & Element in Lexington, MA.

It’s good to see Starwood making an investment into this property. The Clarion has been needing some TLC for awhile now, and Starwood has been itching to make this another prime property of what their concepts are capable of.

andrew@alconic-inc.com

It’s a great move for Parkway Corp – the current owner of the land who operates a public parking lot on the site now. Previously the W Philadelphia was to be built by a company called Urban Residential (ironically, they still have the project listed on their website) “on land controlled by Parkway Corporation” in other words, Urban Residential was going to be operating the W on a land lease, with Parkway still owning the land. Now, with the Home2 Suites, Parkway Corporation will stand to make more money as they will be the owner of the hotel, instead of just a landlord.

Back in 2008 I spoke to Stephen Starr, owner of Starr Restaurants, who was supposed to open a restaurant in the W Philadelphia; at the time he told me he hadn’t heard from the W people in months and thought the project was dead – but no official word was ever made as to the status of the W Hotel project. Eventually it was assumed to be a cancelled project, but there was always hope that another developer may come along and build the W as planned.

Let’s do a comparison between the two projects:

W Hotel Philadelphia (2006)	vs	Home2 Suites (2011)
29	Stories	8
250	Rooms	246 (all suites w/ kitchens)
95	Residences	0
11,000 sq ft	Meeting Space	2,000 sq ft
Bliss Spa	Spa/Fitness Center	Pool/Fitness Center
?	Parking Garage	860 Spaces
$150,000,000	Estimated Construction Cost	$60,000,000

I have no doubt that this project will be built and will be opened as planned in summer 2013 – smaller projects, vs high end boutique projects are being built at a much faster rate in the current economy, plus its location – directly across from the Philadelphia Convention Center is a great location for an extended stay hotel.

andrew@alconic-inc.com

I suggest anyone who is interested in Starwood Capital or Barry take a read at it.

Renaissance Man: As Starwood Capital Turns 20, Founder Barry Sternlicht Explores New Paths

Some quotes I found interesting

On Starwood’s investment in Hersha Hospitality Management:

The investment in Hersha Hospitality Management raises Starwood’s profile in hotel management. Its SH Group affilate manages the Baccarat brand and is developing four properties in the Middle East and four in China. Starwood’s investment in Hersha will help that company expand its management portfolio from about 80 properties today to as many as 200 in the next three to five years, Shah said. That growth will come from third-party management agreements, from hotels owned by Starwood funds and from managing hotels acquired by Hersha Hospitality Trust. In approaching such deals, Sternlicht takes the role of a visionary, who masters details without getting lost in them, Shah observed. “He’s a very demanding executive of his team as well as of his investors and his partners.”

On Starwood’s creation of Starwood Property Trust

Starwood Property Trust also marked Sternlicht’s return to the public markets after his departure from Starwood Hotels in 2005. In its mission, however, Starwood Property more closely resembles iStar Financial, the publicly traded investment banking firm that Sternlicht founded in 1998 and chaired until divesting Starwood’s interest in the company five years later.

I always knew that Starwood Property Trust was somewhat modeled on iStar Financial.

Lastly, it’s interesting to me that Sternlicht has some of the same interests as me:

The hotel business, meanwhile, had proven to be tailor-made for Sternlicht’s wide-ranging interests in capital markets, operations, marketing and design

andrew@alconic-inc.com

This is pretty interesting because it’s the first time that a hotel is being based on a “restaurant experience”. In fact, I cant even think of a restaurant within a boutique hotel that considers itself based on the hotel brand – although Jose Andres’ Bazaar at the SLS Hotel in LA seems to be pretty close.

This is a different approach for the Caesars brand and Caesars Entertainment as well since I cannot think of another instance where they have a different hotel brand within one of their properties other than the casino branded hotel. On the other end of the spectrum is MGM Resorts, Caesars Entertainment’s biggest competitor which has been building these sub-brands within their properties for years.

As an example, look at the Mandalay Bay which has both a Four Seasons Hotel and “THE hotel” in addition to a more basic Mandalay Bay hotel stay.. MGM Grand has “The Mansion” (a super exclusive hotel brand connected to the property, but deeply hidden, it isn’t bookable by the general public either – you need to be a high roller and invited to stay there), SkyLofts and a much, much smaller sub-brand – Signature by MGM Grand.

Anyone who is familiar with Caesars will applaud this decision because the Centurion Tower has been underwhelming for years, rightly so as it was the first tower to open in 1970 and has started to show its age. What’s interesting is how it was decided to renovate the Centurion Tower vs completing the Octavis Tower which was left unfinished after the recent recession. (The building looks finished from the outside, but is empty on the inside.)

The plan is to create a completely separate experience for the Nobu Hotel, with its own entrance and check-in desk instead of combining it with the rest of the Caesars property as is done now. Overall, this is a great idea and probably a win-win for both parties – Caesars & Nobu Hospitality, as encourages a new crowd to come to the Caesars Resort in Vegas, launches a new hotel brand without requiring as large of a capital outlay and lastly allows Caesars Entertainment to dip its waters in a new concept which can easily be replicated in their Atlantic City Casinos such as Bally’s and Caesars.

andrew@alconic-inc.com

In the last few hours my email inbox has been bombarded with news that Barry Sternlicht’s Starwood Capital has purchased 1414 Ave of the Americas in Manhattan for a conversion into a hotel. This is pretty exciting news because its one of the first purchases that Starwood has made in years on a property to be converted or built from scratch in the lodging industry. I’m not going to sit here and claim that hospitality development is finally on the upswing because of this purchase; but I will say that Starwood Capital would not have moved on this property if there was not the potential of a huge upside. Purchasing a 110,000 sqft 18 story, almost 100 year old building, one block from Central Park in mid-town Manhattan for $72 million is a pretty darn good deal.

1414 Ave of the Americas is a pretty low-key building, for years it was used as office space and ground floor retail, although in 2009 it made the news when Ian Schrager was looking at it for one of his hotels (prior to Edition). Unfortunately at the time the owner lost the property when the mortgage was sold and Schrager’s project never got off the ground.

The building was even originally built as a hotel – and apparently KISS had outdoor concerts on the rooftop years ago, although I cant seem to find any information as to when the place was last a hotel – the earliest article I could find about the property was from 1992 when SL Green first purchased it and converted it from a “shoe building” (catered mainly to the footwear industry) into regular professional office space.. And professional office space its been since then, although now it is almost completely vacant – making it ready for an immediate renovation.

There already has been some speculation that Schrager may be involved with this new purchase – but I find that highly unlikely.. It would be a huge reversal for Sternlicht as his name will bring the same (and probably even more) cachet to any hotel project.. Barry may not have “invented” the boutique hotel industry – but he definitely did popularize it and make it mainstream.

So what could the future hold for 1414 Ave of the Americas? Its tough to say.. Will Starwood & Sternlicht team up with Hyatt or Starwood Hotels or even use his brands from Groupe Du Louvre (Golden Tulip) or perhaps some other large luxury hotel brand? Or will this finally be the beginning of a long line of hotels from the SH Group which never really got off the ground after the economic shakedown of the past few years..

Ah – this news will have my heart pumping fast tonight!

andrew@alconic-inc.com

Morgan Stanley — after failing to raise money for Revel last month — is launching a new $1.15 billion debt offering so Revel can finish construction, sources said, confirming a Standard & Poor’s LCD report.

The bank, which has hired JPMorgan to sell the loans, meets potential investors today.

Christie’s motivation seems to be based on the need for more jobs in NJ. What Christie seems to be ignoring is the fact that Atlantic City is losing a lot of visitors to Philadelphia and other out-of-state casinos.

One thing that will help projects like Revel and the Borgata is it’s focus on more than just gambling.. Atlantic City’s “Super casinos” such as Borgata, Revel and even Harrah’s and the Tropicana are able to tap not just the gambling public by having restaurants branded by celebrity chefs, popular nightclub venues, and headlining acts that cater more toward the younger set vs the platinum set.

No matter what, the finishing of Revel will give Atlantic City a big morale boost, and when its finished – bring in more visitors eager to see this new casino who will trickle out to the other casinos in town.

andrew@alconic-inc.com

Here is Hilton’s Statement

In the lawsuit, originally filed in mid-2008, Starwood accused Hilton of stealing thousands of confidential documents and material which had information on how to create, brand and operate a boutique/lifestyle hotel brand. At the time, Hilton had wooed two Starwood Executives, and essentially their entire support staff and in a matter of months created the Denizen hotel brand. The support staff and executives had intimate knowledge of Starwood’s W hotel brand.

Starwood was sure to win this case from the beginning – starting with the drop shipment of thousands of propriary Starwood documents to Starwood’s corporate headquarters with a note from Hilton’s lawyers stating in essence “we found these in our possession, and thought they should be sent back to you”.

In the aftermath of the lawsuit, Hilton’s boutique/lifestyle brand – Denizen – was completely cancelled, and their entire luxury development team fired, it went right up to the top with Steve Goldman stepping down from Hilton.

The settlement between Starwood & Hilton has been detailed as containing the following three items

1. A moratorium on Hilton working on the development/planning/creation of any lifestyle brand until January 2013
2. A cash sum payment to Starwood, the amount of  which was not detailed
3. The supervision of Hilton by federally appointed monitors to ensure Hilton will be abiding by these rules.

In addition, it mentioned that the Federal Grand Jury investigation is still continuing and this settlement has nothing to do with that investigation. According to the Wall Street Journal, Hilton has been told it should not expect charges to be filed against it in the investigation; I think the settlement with Starwood should push that investigation to a close and will probably result in no action since Starwood seems to be satisfied with the results.

There was really no doubt in my mind that the case would end this way – it was just a matter of how long it would be until Hilton could develop a boutique/lifestyle brand, and how much Hilton would have to pay Starwood. I still wonder what it has done to the careers of Amar Lavlani and Ross Klein.. Are they ever to be employed by a major corporation again? It’s a sad story because I knew both of them, and have met them a few times, so I’m still a little suprised that they did what they did – but I think it comes down to this: money talks.

andrew@alconic-inc.com

Schrager also announced in the same press release that he was selling his interest in the Gramercy Park Hotel, which has been a great success – but not without unrest between him and partner Aby Rosen.

With Schrager Hotels, Schrager is looking to create two distinct hotel brands – as I mentioned in this post a little under two months ago. He’s looking to launch then in “24 hour cities” around the world, and has already placed bids on a number of properties in New York City, is currently proceeding with renovations on his purchase of Chicago’s Ambassador hotel and recently took a tour of the Chelsea Hotel in NYC, but deemed it not right for what he’s looking at. And by the way – I’ve never seen so much press coverage about a hotel developer taking a walking tour of a hotel in my life, are we that desperate for news lately?!

Schrager Hotels currently is still using the IanSchragerCompany.com domain name/website – typing in SchragerHotels.com just redirects to his primary website, which in itself has not been updated in years – it’s entry on edition hotels is still listed with the original press release, and doesn’t even refer to the brand by name yet (if you remember – the partnership was announced, but it was a few months before the name was chosen). Details about the 2 new brands are still difficult to come by. Today’s press release only stated that the new company will have

..one luxury lifestyle brand and one that will be reasonably priced. Both new brands will be rolled out in 24 international gateway cities around the world with the first opening in Chicago in 2011. (The Ambassador which should open in the Fall)

I’m curious to see where Schrager will take these new hotel brands and exactly how they will be positioned, will the reasonably priced brand be priced similar to Starwood’s Aloft? Or will it be priced similar to a Sheraton/Westin, yet have the W Hotel feel? I predict the luxury brand will easily be positioned within the same level as the Four Seasons, or Ritz-Carlton – yet have a boutiquey feel, pretty similar to his creations with Morgan’s Hotel Group. From the story in today’s WSJ about the launch, the hotels in the less expensive brand will have hundreds of rooms, leading to the possibility that they could be convention center hotels, a unique pairing which I dont believe has been done yet – “stylish hotel convention centers”.

I also saw mentioned today that he is looking into hotels that have been in major cities for 30-40 years and need loving touches to bring them up to par to standards that people expect when staying in a hotel.

One thing I do like – and it sets the tone of his company and brands is the logo. I’m always fascinated by the logos that companies choose to represent for their brands – the good brands will choose a logo that has more than one meaning – not just a graphical representation of the comapny’s name.. A good logo will also set the tone of the brand – be it classy, funky, elegant, modern, etc.. Schrager Hotels does both of that. Let me explain how.. The logo is clearly a “SH” with the H superimposed over the S – but it can also appear as though the H is made up of two I’s – standing for Ian. Additionally the font they used is a font which reminds me of the Gothic look – which is excatly what some of his past creations have shown in their designs, case in point: the Gramercy Park Hotel.

In my opinion, there are really only two people who really set the standard for whats “next” in hotels – Barry Sternlicht and Ian Schrager. It will be fun to watch this brand grow and become what Morgans Hotel Group could have been.

andrew@alconic-inc.com

I have to say, it’s hard to believe that this day actually came – almost a year later than it was originally supposed to open under the original developer Bruce Eichner, and 5 years after the project had its groundbreaking. In fact, a lot of people thought it would never open at all. It’s interesting to note that the Cosmopolitans neighbor – MGM’s CityCenter – took less time and is much, much much bigger.

I wanted to share some sidenotes about the Cosmopolitan and it’s development that seem to have been lost in the shuffle of it’s grand opening today..

-Unlike the original plans, condos will only be in the West Tower (the West Tower is the one not on the Las Vegas Strip), originally the condos were to be split between the two towers and intermixed with hotel rooms.

-There are about 2,000 condos available for sale still, only 214 are under contract – possibly to close on Jan 1st. (via LV Review Journal)

-Bruce Eichner, the original developer of the Cosmopolitan, is already off onto another project – just like he said he would be in the WSJ article I posted to in my first Cosmopolitan Las Vegas post. He is looking to finish the troubled One Madison Park highrise right on NYC’s Madison Square Park, an absolutely beautiful building which is going through the same troubles that the Cosmopolitan once went through – at least this time he’s trying to be the savior instead of looking for one.

-The interiors of the Cosmopolitan were designed by David Rockwell and the Rockwell Group – he’s the same person who created Starwood’s aLoft interiors, and a favorite restaurant of mine which is a little closer to home – Bobbys Burger Palace. Apparently Bruce’s original interior elements contained 20-ft high dancing robots, which to me would be just ridiculous.

-The Cosmopolitan project is still owned by Deutsche Bank, and Deutsche intends to make the project a long term investment and play an active role in its management. Out of all the other major Vegas/Atlantic City casino projects, Deutsche is the only one who actually stuck to it’s guns and finished the project in this economy. They get kudos in my book for that. Recently, Morgan Stanley let it be known via an SEC filing that they would let their Revel Atlantic City project essentially sit vacant and unfinished for years until the economy bounces back since they have been unable to find a buyer. That’s even after Morgan Stanley was willing to take no money for the project until the investor made a 20% return on their investment of at least $1.2 billion to finish and open the development.  The Fountainebleu in Vegas, which is over 70% finished – a lot of rooms were completely furnished – was purchased for only $150 million by Carl Icahn, leaving the lenders with almost a $1 billion loss.. Wow.. I think that in 5 to 10 years Deutsche Bank is going to look great by finishing this project and not selling it for a song. This economy is tough though, and if you don’t have the capital, well – you’re hands are tied. Deutsche Bank is a large, worldwide company, but they are still almost have the size of JP Morgan Chase & Bank of America by assets.

-Ok, I have to make one mention of the interior of the hotel which has been bugging me until today.. You know those 8 pillars in the lobby (if you’ve seen pictures or video of the lobby, you’ll know what I mean) are full video walls on all four sides, floor to ceiling, no projection screens, no 3D images, no LED walls, they are full motion video screens. Wow.

Best of luck to the Cosmopolitan! Only 40 more minutes until the first bet is placed.

andrew@alconic-inc.com