Schrager Partners With Durst Fetner on Public-Branded Hotel in Manhattan
Ian Schrager, who pioneered the boutique-hotel concept, is partnering with developer Durst Fetner Residential LLC on a $400 million Public-branded property in Manhattan, with plans to open in about three years.
The 250-room hotel, to be called Public New York, will be in the first 16 floors of a 56-story building just south of Herald Square, Schrager said in an interview today. Rooms will run about $300 a night. The remaining floors will house apartments owned by Durst Fetner with rents of an average of $4,500 for one-bedrooms and $6,500 for two-bedrooms, he said.
Schrager is building less-expensive hotels with high-end amenities in “gateway” cities amid a lodging recovery. The developer’s company, Ian Schrager Co., bought two sites in New York City, he said last month. The second site, in lower Manhattan, will be used for another hotel under the new flag. It will open about the same time as Public New York, he said today.
“I’ve been for more than 30 years in this business, and I am more excited about the Public brand than about anything else I’ve ever done,” Schrager said. “I see the same opportunities we see in the select-service space but with luxury service. This is a wide open space.”
The Public New York will be 70 percent financed, and Durst Fetner is talking with lenders, Schrager said. The hotel will have a 10,000-square-foot (930-square-meter) restaurant, nightclub and bar, gym and swimming pool.
The partnership was reported earlier today by the Wall Street Journal.
Second Manhattan Hotel
The lower Manhattan hotel will have 350 rooms, he said. Schrager said he plans to sign a construction contract for the ground-up development at the beginning of 2012 and complete the project within 30 months.
Ian Schrager Co. is seeking to build and revamp properties in metropolitan areas including Los Angeles and Paris. In early October, it won a 76 million-pound ($119 million) bid for a Crowne Plaza hotel in London, and it opened its first Public hotel in Chicago on Oct. 11. The company plans to have about 20 locations within seven years, according to Schrager.
Hotels were among the first real estate categories to recover following the 2008 Lehman Brothers Holdings Inc. bankruptcy as business travel and tourism rebounded. Developers are planning about 50 hotels in New York through 2013, more than triple the number in Washington, the next-busiest U.S. city for construction, according to hotel-consulting firm Lodging Econometrics.
New York will have a record 90,000 hotel rooms by the end of this year, a 24 percent jump since 2006, Mayor Michael Bloomberg said in a statement today. Tourists spent $31 billion in the city last year, he said.
“More people want to visit New York City than ever before, and with a record 90,000 rooms, we have great places for them to stay,” Bloomberg said in the statement. “That’s good news not just for tourists, but also for the city’s economy.”
The mayor is the founder and majority owner of Bloomberg LP, parent of Bloomberg News.
Schrager and his business partner, the late Steve Rubell, started the boutique-hotel trend in 1984 with the Morgans Hotel in New York. Schrager also opened the Delano in Miami; the Mondrian in West Hollywood, California; and the Hudson in New York. All are now operated by New York-based Morgans Hotel Group Co. (MHGC) He left the company in 2005 to start Ian Schrager Co.
Schrager also is a partner in Marriott International Inc.’s high-end Edition brand. The Bethesda, Maryland-based hotelier last month agreed to buy the Clock Tower office building near Madison Square Park in New York. Schrager said he expects the deal to be completed in January, and renovation of the property to be finished within 14 to 18 months.
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