The Real Deal New York

Ian Schrager’s NYC return

After a Manhattan break, the boutique hotelier is back with five projects

September 01, 2014
By Mark Maurer

Ian Schrager

Ian Schrager (Credit: SCRIVO)

Ian Schrager, who is regularly credited with pioneering the boutique hotel concept, is on something of a New York real estate tear.

Schrager has a string of Manhattan projects in the works after a seven-year New York City development hiatus.

It’s not that he’s been sitting idle.

Schrager was busy launching two hotel brands: Edition, a partnership with Marriott International, and the mid-priced chain Public. Public debuted in Chicago, while Edition launched in Istanbul and London, and is scheduled to open in Miami Beach in November. Over the next three years, Marriott also plans to open Editions in China, Thailand, India, the United Arab Emirates and Los Angeles.

Now Schrager, 68, is bringing four hotels (two under each brand) to Manhattan, as well as a 12-story West Village condo to market.

Schrager’s last project in the city was the swanky Herzog & de Meuron–designed 40 Bond, an 11-story Noho condo, which he developed with Aby Rosen. He also developed the 23-unit cond-op component of the Gramercy Park Hotel in 2005.

But sources say his style has since evolved and that his new projects are going to make waves in the industry.

“I think he’s going to shock everybody when he brings these two brands to New York,” said hotel investor Steven Kamali, a former owner of the trendy Surf Lodge in Montauk. “People haven’t figured out his potion, and in gateway cities, his name still carries tremendous cachet.”

Project specs

Schrager’s Manhattan Public hotels will be located at 215 Chrystie Street on the Lower East Side, and at a yet-to-be-revealed Far West Side site. His Edition hotels are planned for the landmarked Madison Square Park Clock Tower building and Times Square and are set to open in 2015 and 2017, respectively.

While the details of all of the projects have not yet been released, the 25-story Chrystie Street Public will reportedly include 11 condos on the upper floors. Douglas Elliman Development Marketing is handling sales at the project, which is being developed with the Witkoff Group. Real estate website Curbed reported that prices there could hover around $4,000 a square foot. Schrager declined to comment.

And his condo project at 357 West Street, which is also being developed with Witkoff as well as Howard Lorber’s Vector Group, will have 88 units. Pricing is not yet available.

Schrager has tapped Herzog & de Meuron again for both projects.

George Yabu, whose New York–based design firm Yabu Pushelberg handled interiors for two of the previous Edition hotels and is working on the Times Square Edition, told The Real Deal that Schrager pushes his ideas hard.

“It means you, as a designer, need to keep your mind open, but also push back sometimes to maintain the direction,” Yabu said in a statement. “He appreciates that, because that back-and-forth ultimately leads to the best result.”

Schrager’s evolution

Schrager, of course, first made a splash as co-creator of Studio 54 in the late 1970s.

He then launched a series of successful hotels, co-founding Morgans Hotel Group in 1984. The hotels — Morgans, the Royalton Hotel, the Paramount Hotel and the Hudson Hotel — delivered an as-of-then-unheard-of level of boutique luxury and cemented Schrager’s status as a hotel innovator.

“In the Morgans days, the hotels he developed were very much socially prominent,” said John Fox, who recently retired from the hotel research firm PKF Consulting. “The hotels’ bars and restaurants drew a lot of publicity.”

Fox said Schrager — who left the Morgans Hotel Group in 2005 to establish an eponymous hotel and real estate development firm — has now “evolved away from hipness to a more thoughtful design of the room and sensitivity toward pricing.”

The move appears to have been well timed. “The millennials, and Generations X and Y, care less about traditional luxury than form, function and value,” said Eric Lewis, executive managing director of hospitality and gaming at Cushman & Wakefield, who handled valuations for Schrager on several of his Morgans-era New York City hotels.

Public, a pet project for Schrager, undoubtedly emphasizes value over luxury. Edition, on the other hand, is more luxury-focused.

Vijay Dandapani, president of Apple Core Hotels — which owns several mid-priced Midtown hotels — said Edition retains the dark-toned interior ambiance of Schrager’s earlier projects, but addresses some of their flaws. The Hudson Hotel and the Paramount Hotel, for example, were known for their small rooms. But Schrager has enlarged the rooms this time around.

Sean Hennessey, CEO of hospitality consulting firm Lodging Advisors, said staffers at Schrager hotels have told him that Schrager attends every quarterly operations meeting. “He is underappreciated as an operator and finance person, and diligent in making sure the hotel is well-run,” Hennessey noted.

Other NYC hoteliers praised him as well. Morris Moinian, founder of the development firm Fortuna Realty Group, said Schrager’s work has inspired him on “how to be an all-in-one: a designer, financier and developer.”