There is no information on branding of the property – which is of special interest to those who follow Starwood Capital & Barry Sternlicht – so no word on if it will be a “Sternlicht inspired” hotel (eg – 1Hotel or Baccarat),or if it will be a Hyatt or other established brand. But they did have a picture, and some basic facts – 340,000 sq ft, 120 key 5-star hotel, and another 140,000 sqft of residential with hotel amenities.

It’s difficult to tell just by the appearance of the building – but it does show a few elements which could be unique – an outside pool deck area mid-building and a grassy/tree-filled terrace on the upper third of the building as well.

Starwood Capital’s Other NYC Hotel Projects

HotelNewsNow.com reported that Barry Sternlicht recently stated that he has three hotel projects currently on the drawing board in NYC: The Donnell/Tribeca Associates project mentioned above, the conversion of 1414 Ave of the Americas, and another unannounced project that he’s keeping close to the vest. Once again, there is no word or indication as to the brands of these hotels – will they be Starwood Capital brands, or will they be branded with other well established luxury brands?

I’m thinking that these projects will be some type of new or unique brand to Starwood Capital because typically they will not make a big deal in the press or market about “just another hotel transaction”. I’m sure we’ll find out one way or another over the next few months.

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

Today, according to a press release from Orient-Express, it isn’t Starwood Hotels – but Starwood Capital which is taking over development of the project into a “World-Class Hotel”. So it is still possible it may be a Starwood Hotels branded hotel, I’m crossing my fingers it may be something from Starwood Capital’s hotel portfolio instead.

The press release states that Starwood Capital & Tribeca Associates

..will assume all the terms and obligations of the original contract made between Orient-Express Hotels and the New York Public Library, including the reimbursement of all previous payments made by Orient-Express Hotels and the assumption of all future payments.

After some research into the original announcement and development proposal by Orient-Express back in 2007, the project was described as this:

The five-story building on West 53rd Street will be razed to make way for an 11-story hotel, but the library will own and occupy space on the first floor and underground under the terms of the deal, the two sides said. Five floors of the hotel will connect to the “21” Club on 52nd Street, also owned by Orient-Express.

With:

150 rooms costing $750 to $2,000 per night and a restaurant on the top floor.

The hotel was originally going to be called “21″ based on Orient-Express’s “21 Club” but with the new ownership group, its doubtful it will be a 21, although there still is a chance it may connect to the 21 Club.

I’m eager to see what Starwood Capital chooses to brand this site, as well as a their other recent purchase of 1414 Ave of the Americas only 5 blocks North.

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

Not too many details have been released about this transaction – including the cost of the transaction – but both companies claim that Starwood will contribute both capital and deals to Hersha Hospitality Management.

Starwood’s purchase of just less than a controlling interest gives them easy access to a great hotel management company – enabling them to not have to staff up and create the SH Group as a leading management company from scratch, it also provides Hersha, a private company, with some capital as well as great management opportunities that Starwood Capital is privy to due to its own investments.

HHM specializes in select-services brands – as that makes up almost 75% of their portfolio – although in the press release its stated that HHM and Starwood will look for both select and full-service contracts. It’s interesting to note that Barry Sternlicht has said in the past that the opportunities in lodging at this point are more in the mid-scale/select services vs high-end luxury. Most of HHM’s properties are branded by the majors – IHG, Marriott, Hilton and Starwood, but lately they have been managing more independent boutique hotels, especially in New York City.

It’s hard to say exactly what this transaction means for Starwood Capital’s own SH Group, 1 Hotels & Baccarat Hotel brands, but its obvious that this will benefit both Starwood & HHM by providing each party with a service that they need. One change I can see this transaction enabling HHM to do is cast a wider net increasing their geographic service area – currently HMM manages properties encompassed within the triangle which goes from Boston, MA, to Virgina to Pennsylvania.

Today was the first day of the Annual NYU International Hospitality Industry Investment Conference, so this could be the first of a few good deals that are announced, and hopefully more details will be provided.

andrew@alconic-inc.com

One project though – the 1 Hotel Washington DC actually seems like it will be their flagship location – that is.. Once it finally gets off the ground.

Last week I came across a story which did some investigating the status of the 1 Hotel Washington DC – now currently an undeveloped plot of land surrounded by “1 Hotels Coming Soon” signs.

(Photo from Bisnow.com)

It seems as though they were able to get in touch with Neil Jacobs, Starwood Capital’s lead for the SH Group which is in charge of the 1 Hotel & Baccarat Hotel brands.

Neil stated

that the project has slowed due to the credit freeze, but that he’s hopeful it’ll resume by year end.

Unfortunately, that’s also the same time that Perseus Realty Group (the developer) has as their scheduled opening time frame.

Neil also stated that Starwood owns the land free and clear so there is no rush to finish the project due to a mortgage or bank commitment.

Sigh, so when will we see a 1 Hotel?! Hopefully during this time Starwood has had a chance to refine the brand even more, ensuring its success once it finally launches.

andrew@alconic-inc.com

The transaction will close on July 27th, at which time Golden Tulip will be fully owned by Starwood Capital, that includes all joint ventures, development, and management of the Golden Tulip, Tulip Inns and their related brands.

Golden Tulip is expected to be combined with Starwood’s Louvre Hotel Group, and will add to Starwood’s already large portfolio of European hotels under the Première Classe, Campanile, Kyriad and Kyriad Prestige brands. This purchase will further solidify Starwood’s standing as the second largest European hotel group in the economy and mid-scale segment and makes Starwood Capital the 11th largest hotel operator in the world.

Its also worth noting that Golden Tulips current CEO Hans Kennedie will step down from that role, but has been offered a position within Starwood Capital as an independent senior advisor to International Franchise Development, it looks like Starwood is not resting on its laurels in conquering the international franchised hotel market.

andrew@alconic-inc.com

The agreement has been made in principal and its expected to close by June 26th – a quick process which leads me to believe that this has been in the works for quite sometime. Once the closing occurs, Golden Tulip will be brought into the Louvre Hotel Group and make Starwood Capital’s Louvre Group the 11th largest Hotel holding company in the world.

Golden Tulip is a company that’s relatively unknown in America – their single United States location is in Bethsada, MD, and is nothing spectacular. The majority of Golden Tulip’s holdings are in Europe, and Golden Tulip has 260 hotels under the Golden Tulip and Tulip Inn brands.

The growth in the company seems to lay in the Tulip Inn brand – an mid-scale hotel, similar to the other three brands that make up the Louvre Hotel Group. Additionally, the press release infers that another great benefit of purchasing Golden Tulip is the benefits to franchise owners of both the Golden Tulip/Tulip Inn hotels and the existing Louvre Hotel Group franchise owners will get more bookings due to the geographically diverse hotels being within one hotel network. Sounds like we could see the creation of a guest rewards card and the creation of global marketing teams which I don’t think really existed with these brands prior to this announcement.

With the news of the Crillon being placed on the market and Baccarat apparently going gangbusters opening new locations throughout China, Starwood Capital seems to be taking two different routes with their hotel businesses and keeping them completely separate: a luxury route (1 Hotel, Baccarat and (maybe) Crillon) and an economy/mid-scale route (Louvre Group). But that also leaves out the Concord Hotel Group – mainly a management company of high end hotels.  I’d love to see their internal organizational chart as to how these different investments and varying growth makes sense to them.

I dont think this will be the end of Starwood Capital’s focus on acquiring existing hotel brands, especially since prices are low enough for assets to be purchased at great discounts vs. their real worth.

andrew@alconic-inc.com

The article had a lot of conflicting information – perhaps due to the language translation, but it stated that the 1 Hotels projects will all be hotels, where as the Baccarat projects will primarily be residential – apparently the response to the Baccarat Residences, Shanghai has been great which gave Starwood the optimism they needed to expand that project.

Starwood is using $2 billion dollars it’s raised, evenly split between it’s non-hotel fund and it’s hotel fund to create these projects, each one is expected to cost between $10 and $200 million dollars, and they are expecting a 12-20 percent yearly return on investment – a pretty high number considering the state of the worldwide economy, but a very logical number for most developments. The timing just seems to be too soon for this to all work out.

The first project which will be under development is the Baccarat Residences Shanghai, which apparently Starwood “will sell” next week. It’s unclear if Starwood is selling the entire project to another developer while still being involved with the project via management and its use of the Baccarat name, or if its inferring that Starwood will start selling units to the public at that time. I tend to think next week will be when they start selling the units to the public since the Baccarat Residences, Shanghai website is still incomplete.

The article also goes on to mention how the first Baccarat project will open in Hawaii next year – but I’ve heard many rumors that the project hasn’t even broken ground and was indefinently delayed.. In fact the projects website has been down since at least the beginning of 2009 – redirecting to the main Baccarat Hotels website. It also states that the Baccarat Dubai project is on schedule for a 2011 opening – another fact that I find hard to agree with since almost all development has stopped or been considerably scaled back in Dubai due to the economic climate.

Over all, this article seemed to be too optimistic – since I’ve heard many stories that just don’t add up to what this story states. Additionally, I find it a little hard to believe that the only place that Starwood is focusing the development of its hotel brands is within China.

Something the article didn’t really touch on – except for a simple sentence stating Starwood would see to own or manage the projects, is the status of Starwood’s newly created SH Group. SH Group was created earlier this year with a very small initial investment of $100 million, with the purpose of opening and managing new 1 Hotel, Baccarat and Crillon locations (more on that here). It’s not very clear what the status of SH Group is, and $100 million is a very small investment – compared to the $2 billion that Starwood is apparently spending in China.

So whats going on here? Anyone have any insight?

andrew@alconic-inc.com

If you didn’t watch it already – Bloomberg TV did probably one of the greatest interviews of Barry Sternlicht I have ever seen. In it he took time to explain the 1 Hotel brand and showed the design board where the designers figure out colors, textures and materials to use in the hotels. In fact, there was even a rendering of a 1 Hotel that i have never seen prior to the interview, so its apparent that the 1 Hotel brand is in progress.. In it he also claimed that the first 1 Hotel will be opening when the economy comes out of the recession.. A bit vague – yet decidedly assuring that it will happen. From all indications Ive seen it sounds like the 1 Hotel Washington DC will be the first 1 Hotel to come online toward the end of 2010.

The biggest hint that the brand is still is in development is a new flash animation at 1Hotel.com. Unfortunately after the animation is finished it brings you to the site that hasn’t really changed since the addition of the “One” page, but still its progress in an otherwise dismal economic environment!

The flash animation doesn’t really provide further insight into the brand – its merely nice music, nice pictures of environmentally friendly materials, concepts, and places, but it also has alot of text which shows what the brand is about.

1 Hotel Logos in Flash Animation

One quote from the animation:

“We don’t want to tell anyone what to believe,
We just want to show them what we believe.”

It’s going to be fascinating to watch Starwood create this brand – from the information contained in this animation, to what Starwood has been promoting all along, it has the capability  to change what is expected in the hotel industry forever – and that expectation isnt just a bar in the lobby, or a room with a really comfortable bed – its the expectation that staying at that hotel will help the environment, make our natural habitats last longer, and bring its natural beauty in to the fabric of a hotel.

andrew@alconic-inc.com