Chicago-based Hyatt Hotels currently has just two lodging locations in New York City but plans to open another of its lifestyle themed hotels, Andaz, this July 1 in Midtown.
Steve Haggerty, global head of real estate and development for Hyatt, and David Tarr, senior vice president of real estate and development, sat down with The Real Deal at the company’s nearly-completed Andaz, at 485 Fifth Avenue at 41st Street.
Hyatt’s two existing hotels in Manhattan, are the Grand Hyatt at 109 East 42nd Street and the Andaz at 75 Wall Street in Lower Manhattan. In addition, the company is reportedly in talks to open a Park Hyatt in Extell Development’s mixed-use tower set to rise at 157 West 57th Street, and a Hyatt-branded hotel could be developed at 100 West 125th Street in Harlem.
Hyatt is set to open the Midtown Andaz on Fifth Avenue in July and there are reports of two more hotels being planned. Are you looking at new locations for hotels in New York City?
Tarr: All the time. We’ve got a number of projects that are too early to announce but we are confident are going to be forthcoming.
Tarr: Less than 10.
How difficult was it to build this hotel, which Hyatt owns and developed, unlike much of the portfolio which is built and owned by third parties.
Haggerty: It has been a learning experience. What I will say is that… redevelopment on a going forward basis is not going to be our primary method. [But] this brand is not just a building, it is a service model.
Despite the difficulties of owing and operating here, why are you planning to expand your presence in New York?
Haggerty: New York is almost an obvious place where you need to be for that added brand value [that] inures to your project because of its visibility and the amount of international and domestic travelers. For us New York City, for all or our brands… is a huge priority.
What neighborhoods are you looking at in Manhattan?
Haggerty: I would say we’ve had dialogues certainly in Wall Street, we’ve had dialogues in Chelsea, Soho, Midtown, Times Square… Union Square — again, another area where you are seeing hotel development that we are interested in.
Smith Travel Research reported that 46 hotels were scheduled to open in New York City this year. Are you concerned with a glut?
Haggerty: What you are seeing is a lot of that new supply is projects that have been delayed meaningfully because of financing constraints, [and they are] coming back on line. [However,] New York is a very difficult market to build in, and real estate in Manhattan is highly constrained in terms of its growth and availability of its sites.