Hotel Indigo, the colorful 122-room newcomer to the Chelsea scene, may soon get a trio of siblings to the north, south and east.
Hotel owner Morris Moinian, 48 — not to be confused with his older real estate developer brother, Joseph, 55 — unveiled the newly-constructed 127 West 28th Street hotel, part of the InterContinental brand, in October, and is now plotting three more Indigo-franchised hotels in Manhattan over the next three to four years, he told The Real Deal yesterday in an in-office interview.
Moinian is president and founder of Fortuna Realty Group, the private real estate company that developed the Dylan Hotel (sold to the HOTUSA Group and Losan Hotels World for $78 million in 2007) and has holdings in New York City, Florida, California and the Caribbean. The Iranian developer said he’s eyeing Tribeca-Soho, the Upper East Side, and Midtown, near Grand Central Terminal, for Indigo’s next landing spots. Ideally, the hotels will be built from the ground up, with 100 to 150 units apiece, he said.
Moinian has already looked at hundreds of properties and has extended bids on roughly a dozen, but was ultimately “too aggressive” with his pricing, he said. Some of those properties were never sold because the banks that owned them didn’t want to take a hit, he added.
Financing for the projects is in the works, Moinian said. He expects to pool funding from his personal resources, investors and, though opportunities will be more limited than in past years, from banks.
“Financing [for those projects] doesn’t seem to be an issue at this time,” Moinian said.
Whenever and wherever the new Hotel Indigo’s come online, they’ll be joining a chain that managed to launch on schedule and on budget amid one of the worst credit crunches in recent history.
Moinian said the hotel’s performance has been “outstanding” thus far, with expected occupancy at nearly 90 percent for 2010 at an average daily rate of $283. Some of the financing for the $50 million Hotel Indigo project, provided by M & T Bank, was secured before the downturn, he said, while some was made available to him during the credit crunch.
Still, Indigo has hardly been immune to the industry’s woes. Back in the planning stages, Moinian said he had anticipated that the hotel would debut with room rates above $300 per night. Instead, they were around $280 and have since dropped to below $200, though Moinian stressed that January is the off-season.
“The industry as a whole has lowered rates way too much,” he said.
Moinian added that “although the [occupancy and room rate] numbers are down in the city and in the nation at large, there’s still money to be made in the hotel business.” He said he believes the neighborhood of the current Indigo — the hastily-developed Sixth and Seventh avenue corridors in the West 20s — will become “hotel rows” with a number of new properties and restaurants over the next three to five years. Indeed, one block over from Indigo, the 54-story structure rising at 835 Sixth Avenue will soon be J.D. Carlisle Development’s new Eventi Hotel, and Sam Chang’s 128 West 29th Street property is now a Doubletree.
Moinian was tight-lipped on his business dealings with his high-profile older brother, noting only that the two are “close” and do own some properties together.