Downtown to get 200-room Hotel Indigo (Atlanta, Between: 2014, university, designs)

[Airforceguy]

Downtown to get 200-room Hotel Indigo - Atlanta Business Chronicle

[arjay57]

This is an excellent adaptive reuse!

The location across from the mart can't be beat. And it's a good opportunity to bring these older buildings up to current LEED standards.

[Mishap]

I have to say it's a fairly ugly building so hopefully Indigo can do a little something to dress it up.

John Portman is the Novare of the 60s-90s. Between the drab lego looking Peachtree Center/Embarcadero, polished tin cans Westin Peachtree Plaza/Bonaventure/GM HQ, and his internal atrium Marriotts (Atlanta, Chicago, NYC) the guy only made a few designs in his career and yet managed to photocopy them everywhere.

The difference is Novare's projects are relatively inoffensive residential infill while Portman's massive projects are some of the most dated feeling buildings around. I honestly believe he's a far better developer than architect since he was able to sell so many derivations of the same work and the fact that they're mostly financially successful speaks to his capabilities.

[JoeP]

What Portman did was dated yes, but it was contemporary at the time. I think it's fine that Atlanta has styles reflecting various eras. That said, I don't think a Hotel Indigo makes much sense. Converntioners go downtown and while some may like a Hotel Indigo, most other tourists will find little reason to choose that one, as there is little reason to stay downtown.

[ATL Golfer]

The second owner of this hotel might make money, but it's hard to imagine this thing will break even on operations, let alone after debt service. There is already an aloft going in right there. Bad idea all around.

There just isn't a demand increase to justify new room supply. Downtown has always been overbuilt. Being the newest and shiniest hotel will help, but an IHG flag is not the way to go in my opinion. They would even be better served by a multitude of other flags. IHG must be giving them big breaks on their franchise agreement.

Indigo operates almost as an independent boutique. It's not like the Glenn or the Ellis are knocking it out of the park. The Glenn required the assistance of being a Marriott affiliate to get more heads in beds.

Anyone building downtown without being beside a huge demand generator (aquarium, Philips, University) is setting themselves up for failure. Maybe they will prove me wrong. Hope so.

[JoeP]

They would even be better served by a multitude of other flags. IHG must be giving them big breaks on their franchise agreement

Nope. Downtown (Atlanta at least) is not the target for the brand. Neither is the airport, but someone wanted one there. I'm scratching my head at this decision, but IHG wouldn't be pushing it.

[ATL Golfer]

Originally Posted by JoeP

Nope. Downtown (Atlanta at least) is not the target for the brand. Neither is the airport, but someone wanted one there. I'm scratching my head at this decision, but IHG wouldn't be pushing it.

IHG doesn't care. IHG is a franchise company. They will be getting their franchise fees and that is what they want. They also want to grow a fledgling brand that emerged at the worst possible time of the economic and development cycle. Not to mention they are also probably getting a management contract out of the deal, unless Portman is hiring a 3rd party (doubtful).

IHG loves everything about this. Although they likely gave huge concessions on the franchise agreement and the management contract to make what I imagine was already an aggressive proforma work.

The people who are calling the shots at Portman is who I question. They are not going to get any significant bump in demand from IHGs reservation system. They are developing in a historically soft, over supplied hospitality market.

Hopefully they do the deal with all equity (no debt), otherwise this goes back to the bank by the time the property stabilizes at what ever subpar numbers it produces in year three. There is no exit strategy here either. Indigo is not an investment grade brand. Hopefully their plan is a long term, not very profitable, hold.

[JoeP]

IHG loves everything about this.

No, they don't.

Although they likely gave huge concessions on the franchise agreement and the management contract

Again, to build hotel designed for an area that downtown Atlanta is not? I don't think so.

[arjay57]

Originally Posted by Mishap

I have to say it's a fairly ugly building so hopefully Indigo can do a little something to dress it up.

John Portman is the Novare of the 60s-90s. Between the drab lego looking Peachtree Center/Embarcadero, polished tin cans Westin Peachtree Plaza/Bonaventure/GM HQ, and his internal atrium Marriotts (Atlanta, Chicago, NYC) the guy only made a few designs in his career and yet managed to photocopy them everywhere.

I like Portman's work and there is no doubt that he, probably more than any other single individual, is responsible for giving Atlanta a big city feel. Portman stuck with downtown when many other developers were heading out.

[ATL Golfer]

Originally Posted by JoeP

No, they don't.



Again, to build hotel designed for an area that downtown Atlanta is not? I don't think so.

IHG, along with other franchisors, were probably all lifting up their skirts to get their flag picked by Portman.

IHG isn't going to get pushed into any market they don't want their flag in. They have the right to say no, its their flag. To think they were doing anything but jumping up and down at this opportunity is, well, interesting. They are a franchising company, not an owner, not really even an operator... they are a fee based company who is making a lot of fees on this deal.

Its in their backyard. Trust me. They like it. I worked in the industry for a long time.