Friday, May 20, 2011

290-room hotel set for Lower East Side

The Lower East Side is about to sprout a new hotel.

New Hotel Indigo to open on Orchard Street in 2013, featuring retail space and parking; joint venture pays $46 million for the property.

A joint venture between Brack Capital Real Estate and IHG bought 180 Orchard St. for approximately $46 million and plans to turn the stalled development project into a 290-room hostelry with retail space and parking.

The property will be a Hotel Indigo, a boutique brand that is part of a vast IHG stable, which includes InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts and Holiday Inn Hotels & Resorts. The new property is scheduled to open in 2013. It will boast such amenities as a restaurant, bar, state-of-the-art fitness center and outdoor pool.

“This prime development site presents an untapped opportunity to create a project that will benefit neighborhood residents while adding value to the area overall,” said Issac Hera, chief executive of Brack Capital Real Estate, in a statement.

This will be the second hotel that Amsterdam-based Brack is developing. It is also working on a boutique property in Times Square.

Brack has developed more than three million square feet of office, hotel and retail space as well as 3,000 residential units internationally. The company’s New York portfolio includes properties such as The James New York Hotel, at 27 Grand St.; The Greystone Hotel, at 212 W. 91st St.; The Olcott, at 27 W. 72nd St.; the Element, at 555 W. 59th St.; The Hilton Garden Inn, at 63 W. 35th St.; and both 15 Union Square West and 90 West St.

There has been tremendous interest in Manhattan’s hotel market as occupancy rates fall and room rates increase. On Thursday, the Wall Street Journal reported that a deal had been struck to sell the Palace Hotel on Madison Avenue for $400 million, roughly $445,000 a room.

By Theresa Agovino / Crain's New York Business
May 20, 2011