Brooklyn Hotel Buzz: Boom and Doom

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The Brooklyn Chamber of Commerce hosted a hotel development panel yesterday where participants shared plenty of tasty treats about the hospitality industry’s plans for Kings County. Architect Gene Kaufman, developer Sam Chang of McSam Hotel Group, Hotel Le Bleu’s general manager Robert Gaeta and Heather Parsons of PLC Partners (which is building the 300-room Cambria Suites at 75 Schermerhorn) held forth about the state of Brooklyn’s hotel market. Some highlights:

- Hotel mogul Chang (who built the Comfort Inn on Butler Street, the Holiday Inn Express on Union Street, and is about to start construction on a 200-room Hyatt at Nevins and Schermerhorn) is totally over Brooklyn and pessimistic about the fate of the thousands of hotel rooms currently planned for the borough. What will happen after 3,000 rooms are built? said Chang. “I don’t like it. It’s enough. I’ve stopped buying in Brooklyn.”

- The team behind 4th Avenue’s Hotel Le Bleu has a far less ballyhooed project set to open within the next few weeks. Hotel Le Jolie at 235 Withers Street is going to have rooms priced between $200 and $350 a night, according to general manager Robert Gaeta. It will be Williamsburg’s first hotel, said Gaeta. (Though whether it’s actually in Williamsburg rather than Greenpoint is open to interpretation, we think.) Gaeta also had some strong words for the haters out there who don’t think Le Bleu is going to find takers for its $300-$500 a night rates. I think some of the people writing these blog sites may not be able to afford $400 a night, he sniffed. (You’re right!) Gaeta opined that someday, 4th Avenue will become a boulevard for Brooklyn.

- The credit crunch is going to cause a bit of a shake out for some hotel developers, said Gene Kaufman. The architect (who designed the two hotels slated for Duffield Street) thinks that projects “that don’t make sense won’t get built as borrowers find it harder to finance their developments. And Chang said he’d personally experienced the effects of the crunch because lenders are now looking for 30 to 35 percent equity from borrowers, whereas two months ago they only expected 10 percent.
Duffield Street Hotel Double-Shot Revealed [Brownstoner]
Schermerhorn Street: Not Crappy for Much Longer [Brownstoner]
Hotel Le Bleu Opening Still Stalled [Brownstoner]

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  • $500 a night to stay at a place with a view of the Pep Shop and Staples parking lot?
    That is just mad.

  • It would make complete sense, from a self-serving business stance, that all of the hotel developers who spoke yesterday would be bearish about future projects…

    It’s in their best interest to discourage further construction of hotel rooms, especially from competitors, to maximize the occupancy rates of these new places.

  • 9:08′s comment is just dumb. Any property developer with that kind of vision would not be a property developer – they’d be a blog poster.

  • Interesting perspectives but I don’t think they differ much from the norm – especially from a competition POV as an earlier commenter noted. I think 4th Avenue needs to change a bit more for Le Blue to get (and stay) in the black. I do, however, find appeal in the roof bar and restaurant that they have in the works. To, me, this is the key. Pack a bar and nice restaurant scene into a hotel and it should work – who needs low vacancy rates!?! Again, cab parking lots and car washes need to die a painful death first. I’m sure at some point I’ll consider suggesting a guest stay there for the sake of conveniency and staying close to my rental in PS. Pulling the trigger on that decision I can’t guarantee

  • 9:08′s comment is just dumb. Any property developer with that kind of vision would not be a property developer – they’d be a blog poster.

    Oh really? but the people who bought across from the empty MTA yards, they were not visionaries?

    I think you are posting on a blog no?

    As for hotel blue, I can’t imagine anyone who can afford paying $500 a night in a hotel, dreaming of staying in a hotel that overlooks pep shop and staples, unless you are suggesting that eventually those will also be taking over by other hideous faux franch hotels? That is not vision it it is just blind greedy risk. There is a big difference.

  • There is a hotel in Williamsburg? Where’s the website / local outreach? Or is this like Le Bleu – which has been about to open for months?

  • 908/959…you don’t get it…people staying in hotel rooms in nyc don’t give a shit what they are looking at…they are staying in nyc for a reason and the reason isn’t the view from their hotel room. further to the point – why are people scooping up condos directly across from staple/pep boys? for the view?

  • I can TOO afford–oooh! You jerk! This is so going in my blog!

  • Bullsh*t, 10:08, you obviously don’t travel that frequently. Why the hell would someone visiting NYC pay $500/night to stay on 4th, when they can get a room in the heart of manhattan for less. The location pays for itself, in THOSE instances the traveller doesn’t care about what’s outside of their window…that won’t fly on 4th.

  • Am I the only one feeling gloomy about Brooklyn’s future? Too many hotel rooms, too many condos, too many rentals, etc. Are there really that many people that want to live here to fill up all of those spaces?

  • 1034…great point…soemthing tells me the same thing was said when marriott was “mad” enough to build that hot pillow joint on adams st…i’m afraid you are way out of touch with the reality of the nyc hotel market – good luck finding that $100 hotel room.

  • (Am I the only one feeling gloomy about Brooklyn’s future? Too many hotel rooms, too many condos, too many rentals, etc. Are there really that many people that want to live here to fill up all of those spaces?)

    Yes there are, but not at the prices expected. Some developers and lenders might lose out, but Brooklyn comes out ahead, with $200K one-bedroom condos and $150 a night hotel rooms. The main thing that makes me gloomy about Brooklyn is the high cost of real estate.

  • 10:50 – You will never see $200K 1 BR Condos in this part of Brooklyn. Maybe in Brighton Beach and the outlying areas – For a little while.

  • I just called the Hotel Le Bleu. They are not open yet, they do not have a date and do not know when they will be open. “Could be a few more weeks,” could be longer…

    And they make it sound like they have people lining up at the door to pay that price for that location…

    Oh well, dream big!

  • THE ROOMS ARE 350….NOT 500.

    SO STOP EXAGGERATING AND GET A CLUE

  • $350 is still too high for that location. This was a seriously misguided project from the beginning, and it seems to be suffering from a failure to launch.

  • The demand for housing and hotel rooms is high, but not high enough to justify current prices in many areas. What Brooklyn really could have used was a new, high quality hotel to compete with the Marriott (which DOES do well). The shit boxes that Sam Chang puts up are not long-term investments. They will be the first to go down if the hotel market or economy changes.

    I remember when the Howard Johnson opened up on Houston Street. Many thought it was a dumb move, but the original prices were less than $100 a night. This was like 5 or 6 years ago.

    These Sam Chang hotels will do well when they are priced cheaply, but he purchased the land assuming a much higher income potential than will actually transpire in the long term. That was his mistake, and banks will likely foreclose on many of these properties. In the end, some other group will buy these at a cheap price and they will be profitable to operate for $100-$150 a night. That’s fine.

  • “i’m afraid you are way out of touch with the reality of the nyc hotel market – good luck finding that $100 hotel room.”

    Who said anything about a $100 hotel room? And you aren’t seriously comparing 4th to the Marriots Brooklyn Bridge location, are you?

    News flash – as great as that Marriot is, you can still get a room there for under $200. Do some research.

  • I found Mr. Chang’s pessimism a bit amusing. I sometimes walk past his Comfort Inn, and I can only imagine the horror the tourist or budget businessperson feels upon first seeing where it’s located. Only Mr. Chang could be surprised that he isn’t doing too well!

  • I do not know one single person living in Park Slope who thinks Hotel le Bleu’s pricing is going to fly. And sorry, Monsieur Gaeta, none of those naysayers are poor. Quite the opposite.

  • I live in Park Slope and I do think that Hotel le Bleu’s prices will fly.

    In fact I have three friends from Berlin who are coming in the spring who very much want to stay there…if the damn thing opens up.

    They said they hear that Brooklyn is the new cultural hub of New York and want to be there. They also liked the idea of being close to 5th Avenue as they are familiar with a low-rise city like Berlin and said they hear Park Slope is similar…

  • I do hope your Berliner friends realize that the environs of Le Bleu look precious little like the bucolic vision presented on the website.

    Also, as long as almost all the major theaters, galleries and museums are in Manhattan, how has Brooklyn become the “new cultural hub”?

  • Berliners prefer their culture a little less disnified than here the states.

    They will much prefer the Brooklyn Museum, BAM, a show at Union Hall and things like that over the MET.

    They will hit that stuff also, of course, but most people I know visiting from the big cities of Europe prefer Brooklyn over Manhattan because of it’s smaller scale. I had a few friends stay with me from Amsterdam in the spring for a week, and by the third day, they weren’t even going to Manhattan anymore except for the occassional nightclub…they commented that everything they wanted to see in New York was in Brooklyn. They loved Park Slope immensely.

  • Coming all the way from Europe and then spending your time hanging out in Park Slope? I find that kind of pathetic.

  • People are so short-sited as well as no historical memory

    Of course 4th Ave is no where as nice as the area surrounding The Downtown Marriot – TODAY – when the Marriott opened the area wasnt much better then 4th Ave (except for Manhattan proximity) and it is across the street (now next door) to the Brooklyn Criminal Supreme Court and Family Ct. Hardly an ideal location for a Hotel – much less the 1st 1 in Brooklyn for 50 yrs.

    Most people thought the Marriot would be a failure or at least need assistance but they were wrong and it was such a success that they had to DOUBLE in size and now building the Marriott seems like a no brainer.

    Sure the area around Le Blue is crappy TODAY- but in case you havent noticed, at least 10 projects are close to completion or underway with probably a dozen more to follow. 4th Ave is not going to look like 4th Ave in 5yrs BUT the owners of Le Blue will have built when the land costs and area was cheaper. Seems like a smart move to me and if they have to lower prices and carry the place for awhile, the capital gain on the real estate alone should easily make operation worthwhile.

    The fact that it hasnt opened doesnt speak well for their management but really reflects nothing in terms of the viability of a Hotel like this at this site.

    As for the price – I’d sooner spend $350 to stay at a nice hotel then $150 to stay at that comfort inn on Butler but that is me – but I am sure I’m not alone.

    Things change and while sometime in the future it might have seemed dumb to build so many rooms in or near downtown, I’d bet that the decision to build a Hotel on 4th Ave will also seem like a no brainer in 10years.

  • 2:09 – versus traveling all the way to Hawaii and going to the beach? – cause we know no one does that!

  • or travelling all the way to new york to hit all 50 h&m’s…cause i never see any tourists doing that either.

    park slope is a lovely neighborhood that has friendly bars and coffee shops, terrific restaurants, an incredible park, a greenmarket, flea markets and the largest enclave of intact late 19th and early 20th century architecture in the country.

    i see why europeans (and others) would enjoy that.

    if you don’t, i think YOU’RE kinda pathetic.

  • But is anyone doing hourly?

  • Please, Tribeca is where all the Europeans stay. Everyone knows it.

  • $350 for us is like $200 for your friends in Berlin. Our whole country is on sale! Everything half-price!

  • the hotel doesn’t actually overlook pep boys/staples/taxi depot…they are next door but it’s windows all face either manhattan or across 4th ave (novo/jj byrne park).

    and while staples & pep boys may not be much to look at for buyers at the novo, it pretty much guarantees they will have unobstructed views of the skyline over the tops of the stores.

  • Until, 1:06, staples and Pep Boys sell and 12 story condos are built. Then Novo-ers will get cranky. Speaking of, when is Novosupposed to get finished and populated?