By Scott Baltic, Contributing Editor<\/i><\/p>\n
In partnership with Morris Moinian, founder of Fortuna Realty Group, Starwood Hotels & Resorts Worldwide will break ground later this month on the Aloft New York Midtown, on 38th Street, just off 5th Avenue, the developers announced late last week.<\/p>\n
The site is in New York City\u2019s Garment District, walking distance to Bryant Park, Rockefeller Center, the Empire State Building, the Times Square Broadway Theater District and Madison Square Garden. The 27-story property will feature 180 loft-style rooms and is scheduled to open in October 2017.<\/p>\n
The building\u2019s architects are Nobutaka Ashihara Architects and Paul Vega of VLDG Inc.<\/p>\n
Moinian noted in a release that the property will be Fortune Realty Group\u2019s first Aloft hotel. The Starwood brand has 100 properties open now or in the development pipeline, in 15 countries.<\/p>\n
\u201cThe Aloft is coming into the market at a time when New York will have experienced four straight years of 5 percent-plus supply growth, versus the long-term average of 1.8 percent,\u201d Mark VanStekelenburg, senior vice president and practice leader with CBRE Hotels\/PKF Consulting USA, told Commercial Property Executive<\/i>.<\/p>\n
In the Times Square, Uptown\/Midtown East and Lower Manhattan submarkets, he explained, 37 hotels totaling about 8,200 rooms are under construction, about two-thirds of them in Lower Manhattan. Just within a quarter-mile of the Aloft site, VanStekelenburg added, CBRE is tracking four hotel projects, ranging from limited to full service, that will total 1,083 rooms.<\/p>\n
\u201cWhile the Midtown submarket is down in RevPAR for the first quarter of 2015,\u201d he continued, \u201cthe significant recent supply additions and planned pipeline continue to be absorbed into the market at near-record market occupancy levels.\u201d<\/p>\n
That said, VanStekelenburg added, a combination of factors, led by supply growth, AirBnB and the strength of the dollar, impacting international travel, have all hindered average daily rates in Midtown and in Manhattan overall.<\/p>\n
\u201cWe expect this to continue, with ADR growth in the 3 to 4 percent range the next two years. While this is below the growth rates we would expect to see at this point in the cycle, this remains a strong market with additional opportunity for hotel product,\u201d he concluded.<\/p>\n