« Will Retail Continue to Trump Industry in Red Hook? First Pricing Clues for 20 Henry Street »

August 4, 2008

DOB Green-Lights Cambria Suites Hotel on Schermerhorn

75-Schermerhorn-0808.jpg
More than a year after the news that Cambria Suites had entered an agreement with a franchiser to build the brand's first Brooklyn location, the Department of Buildings signed off on the New Building application for a 12-story, 300-room hotel at 75 Schermerhorn Street in Downtown Brooklyn. The developer for the project paid $22,750,000 for the 17,000-square-foot lot a year ago and plans to erect a 175,000-square-foot hotel on the site. According to a Brooklyn Eagle article last year, the new hotel will have a swimming pool, fitness center, coffee bar and conference rooms on site; as of this morning, though, the parking lot business that's taken up the site for many years was still in full swing. Cambria Suites will have to compete with the 247-unit hotel down the road at 300 Schermerhorn Street. GMAP P*Shark DOB




Posted by Brownstoner at 10:59 AM | Comments (26)
Categories: Development, Downtown Brooklyn, Hotels

Trackback Pings

TrackBack URL for this entry:
http://www.brownstoner.com/mte/mt-tb.cgi/5754

Comments

Holy Crap. How many hotel rooms does Brooklyn need? If they can fill them it will be great for business in the area , that's for sure.

Posted by: guestula at August 4, 2008 11:27 AM

It's incredible how many Hotels have made the decision to build in Downtown Brooklyn. First there was the Marriott, then the Nu on Smith, the Sheraton, the Loft, the Indigo (all on Duffield), the Hilton Garden Inn and Homeward Suites in Oro II, and now Cambria Suites. I probably left out a few.

Point I am making, is that a lot of very smart people see a future in Downtown Brooklyn otherwise they wouldn't all be making such a significant investment. These companies usually have a long term outlook so may not get immediate payback but surely they think they can make money down the line.

If Ratner can get that stadium built along with City Point, I think they all got it right.

Posted by: Junkman at August 4, 2008 11:34 AM

Very good news for both DB and the folks needing rooms, though it has got to be 2 years plus from opening.
As quite a few hotel projects have stalled this year, good to hear this one is happening. Jobs, more bars and more visitors!

Posted by: BK realestate veteran at August 4, 2008 11:34 AM

Wow- the building with the light colored cornice was my home for many years. I can't believe how much building has gone on on that street. More than glad I moved!

Posted by: bxgrl at August 4, 2008 11:34 AM

Hotels only need about 54% occupancy to be profitable.

I'm glad to see all the investment in Downtown.

Posted by: 11217 at August 4, 2008 11:53 AM

11217

There is no set occupancy rate that determines profitability. The occupancy rate figures into gross income. Higher gross income means higher land acquisition costs, which means higher carrying costs.

I share your sentiments regarding the investment in the area.

Posted by: Polemicist at August 4, 2008 12:40 PM

From NYTimes July 31, 2008.

"Professor Hanson, of the Tisch Center, said that at current levels, most hotels could endure significantly lower occupancy and still make money. On average, he said, hotels break even at 54 percent occupancy."

Posted by: 11217 at August 4, 2008 12:52 PM

Come on 11217, give me a break. Over Polecimist, you're actually going to believe Bjorn Hanson, a "leading hospitality and travel industry researcher and consultant at NYU's Tisch Center for Hospitality, Tourism, and Sports Management ... widely respected for his industry forecasts and for having created econometric models that transformed business analysis in the field ... who as been named one of the “25 Most Influential People in the Meetings Industry” by Meeting News, one of 75 industry leaders in Lodging magazine’s “Profiles in Leadership,” and as "One of the 33 Most Influential People in the Travel Industry" by Travel Weekly"?

Posted by: Biff Champion at August 4, 2008 1:10 PM

Junkman:
"Point I am making, is that a lot of very smart people see a future in Downtown Brooklyn otherwise they wouldn't all be making such a significant investment."

Hmmm. Well, you have a point, but are these buildings built not only to be hotels but to stay as hotels? Could it be possible that they are opened as hotels but then a few years later they suddenly turn into "luxury" housing?

I'm willing to bet there's a backdoor condo/coop aspect to the sudden hotel boom.

Posted by: Jack at August 4, 2008 1:14 PM

Love it Biff.

I really don't mind Polemicist pretending like he's smart.

It's kinda cute.

Posted by: 11217 at August 4, 2008 1:21 PM

Jack - I can count the number of hotel to condo/co-op conversions in all of nyc during the last 20 years on one hand. if the developer wanted to put up a condo building he'd do it now or sit on the land and do it later.

Posted by: BrooklynLove at August 4, 2008 1:27 PM

There goes the light/views for all those "courtyard" facing condos at 110 Livingston.

Posted by: BH76 at August 4, 2008 1:35 PM

BrooklynLove, the last 20 years are one thing. The past 5 years is another. I don't think it's a radical idea that it would happen.

People laughed at me in the 1980s when I said Williamsburg would be a boomtown: "Who would want to live in warehouses?" Apparently enough people.

Posted by: Jack at August 4, 2008 1:47 PM

I doubt anyone at 110 Livingston bought a unit facing the inner courtyard expecting light and views.

Anyway, isn't it vastly preferably to have an upscale hotel next door to your apartment rather than a parking lot surrounded by barb wire?

Posted by: 11201 at August 4, 2008 2:15 PM

I agree with you 11201.

If I bought a courtyard facing apt. at 110 Livingston, it would be MY responsibility to look out the window when viewing the property and see a vacant lot and ask about it, if it's a concern.

To expect it would stay vacant forever would be foolish.

If you want a view that will never vanish, buy on a park or on the water.

Posted by: 11217 at August 4, 2008 2:21 PM

That parking lot is particularly ugly, even as parking lots go, and it will be nice to see it gone.

I always see this site referred to as 75 Schermerhorn, not as whatever the corresponding Livingston address would be. Does that imply the hotel will face Schermerhorn?

Posted by: zgori at August 4, 2008 2:23 PM

Unfortuantely yes -- the entrance will be on Schermerhorn (so from Boerum, taxis can make a right and hit the entrance).

And while I agree that they should know that a parking lot is only temporary in NY, there are lots of people who either ignore the fact or choose to believe fast-talking brokers.

And it is not a "luxury" hotel.

Posted by: BH76 at August 4, 2008 2:41 PM

"The 11-story hotel will have 300 rooms plus all the amenities of other Cambria Suites franchises, according to Peikin — including a swimming pool, fitness center, onsite barista coffee bar, meeting rooms, flat screen televisions, and high-speed and wireless capability."


Everyone has a different idea of luxury, BH76, but for Downtown Brooklyn, I'd say this place does sound rather luxurious.

Posted by: 11217 at August 4, 2008 2:49 PM

Sounds like a really great addition to the neighborhood...

http://www.hospitalitynet.org/news/4032402.search?query=cambria+suites

Posted by: 11217 at August 4, 2008 2:58 PM

Other Cambria Suites around the country have pretty good reviews on tripadvisor.

http://www.tripadvisor.com/Search?q=cambria+suites&sub-search=Go

Posted by: zgori at August 4, 2008 3:09 PM

11217

A national statistic such as the one Hanson mentioned has little to do with Downtown Brooklyn or this particular deal.

I just ran some quick numbers and I'd say a 54% occupancy rate would be tough for this project. We know the land cost. Construction costs at $500 a food are another $51,000,000. Figure another $7,500,000 for the developer (15% of construction costs).

The citywide average daily rate is $290 a night. The Marriott is about that, so I'd think this place would be less. If you assume $250 a night, 54% occupancy rate, 60% operating expense ratio, and a 7% cap rate... it doesn't sound possible to me.

Nice quote though, and I do like your post from 2:21.


Posted by: Polemicist at August 4, 2008 3:31 PM

Thanks. I like the way you flesh out those numbers.

I'm more of a concept guy...you seem good with the details.

Posted by: 11217 at August 4, 2008 3:41 PM

I'm not expecting the Burj Al Arab, but it's certainly upscale (note that I never wrote luxurious)--especially for the Downtown Brooklyn area, as 11217 pointed out.

BH76, have you stayed at Cambria Suites Hotel?

Posted by: 11201 at August 4, 2008 3:47 PM

Jack - it would make zero financial sense to put up a hotel with plans of condo conversion in the near future. the concept is idiotic.

hotel construction costs + cost of conversion - 5 yrs hotel net revenues

much greater than

condo construction costs - 5 yrs parking lot rent revenues

in other words, if you plan on converting in 5 yrs it makes more sense to sit on the land and then build 5 yrs from now

Posted by: BrooklynLove at August 4, 2008 7:44 PM

BrooklynLove, who said "near future" or put a timeframe of "5 years"?

Regardless, you're convinced this hotel boom is hinged on these hotels staying hotels. I'm not convinced.

Posted by: Jack at August 5, 2008 11:36 AM

quoting you jack -

"Could it be possible that they are opened as hotels but then a few years later they suddenly turn into "luxury" housing?"

Posted by: BrooklynLove at August 5, 2008 5:00 PM

Post a comment

Please be patient while your comment is published. It may take a moment.

Latest Restaurant Additions