Billionaire investor Ronald Burkle is making his first official foray into the New York City boutique hotel scene with a stake in the upcoming NoMad Hotel. The 168-room project, on the corner of Broadway and 28th Street, is scheduled to open during the first quarter of 2012 after several years of delays, with room rates starting at around $400 per night.
According to the Wall Street Journal, Burkle, whose Yucaipa Cos. already owns a 30 percent stake in Morgans Hotel Group, made his investment through a new venture with Sydell Group, the hotel developer and operator that owns the 124-year ground lease for the site and that is also a part-owner of the Ace Hotel one block away.
The Sydell-Yucaipa venture was formed to seek out investments in boutique hotels valued between $600 million and $1 billion. “We think the sweetest spots are existing hotels that need capital, don’t have the right branding, or could use an upgrade or repositioning,” said Andrew Zobler, Sydell’s CEO.
Hotel industry analysts say the venture could either turn out to be a competitive force against Morgans, which runs the Mondrian Soho, the Royalton and the Hudson, or a source of new business, if Burkle decides to hire Morgans as an operator for his new properties. [WSJ]