Although specific sectors in the U.S. hotel industry might have no funding or sufficient demand to justify further development, New York City has a record-performing tourism market with room for more growth. Manhattan is experiencing a building boom but a certain city block – Herald Square - is moving beyond the norm to an even higher level of success. Developers are interested in this Midtown block because the construction logistics are right for demolition and redevelopment.
Best Western Plus New York City Herald Square
Best Western developers, LeTap (hotel investment, management, and development firm) recognized a superb setting in the Herald Square market. This prime location has an unparalleled view of the Empire State Building. Views to the East are unobstructed and the hotel is at least four to five stories above the structures to the south on 35th St. As well, Bryant Park and Times Square are close to the building.
“We wanted to be close to Herald Square, and this is one of the only spots in the area with low-rise buildings, which are easy to demolish and rebuild ground-up,” explains Jaz Patel, President of LeTap.
Patel did not reveal the plot's sale price. Yet despite the present competitive investment climate, Patel admitted to a quick on-the-spot deal with the owner. After purchasing the plot, LeTap* bought out the building's four retail tenants. LeTap made a significant investment in this hot hotel market – but in the largest concentration of guest rooms under construction on one block.
Other lodging establishments including The Strand NYC, Hampton Inn Empire State Building, the Morgans Hotel, and Setai Fifth Avenue, as well as a Comfort Inn on 35th St., can be viewed from the Best Western’s rooftop garden. Although Patel must ponder the possibilities of returns, there is little need for concern. Recently, the neighboring Hyatt Place sold for almost $77 million.
The 17-storey, 94-room Best Western, will feature five rooms on Floors 16 and 17. Other floors will have six guest rooms. The NYC standard guest accommodations offer 200 to 220 square feet per room at a midscale but competitive rate (about $225).
Patel notes, “Our target guests are going to be leisure; even in Long Island City, our guest base is probably 70 to 80 percent leisure.”
Although space is at a premium, the common area will have a bar and lounge with flat-screens TVs on the ground level and doors leading to an outdoor patio. The basement level will host breakfast, business, and fitness areas. The building features the dramatic contrast of glass in the front looking through to brick in the back.
“Best Western was the first, and really only, brand we considered. Given the cost of their membership fees, there’s really no better deal to develop in Manhattan from a franchise perspective.” ~ Jaz Patel
*As well as having a presence in Midtown, LeTap operates a Best Western property across the East River in Long Island City, Queens.
NYC Hotels Under Construction - Recent News
Although hotel development and increasing rates will stabilize at some point, this booming Manhattan market shows no sign of any slowdowns in the foreseeable future.
Image courtesy of city-data.com