Commercial Observer | September 22, 2016
By Rheaa Rhao
“A madeleine is a kind of cookie,” a mom outside the Whole Foods in Gowanus explained to her school-age daughter. “But also a kind of cake.”
That might sum up Gowanus. It’s not entirely one thing, or another. It’s kind of a cheap alternative to brownstone Brooklyn, but it’s also kind of a pricey (and soon to get pricier) hothouse for the next round of Brooklyn hotels. In the case of both Gowanus and the madeleine, the results are sweet.
According to Alec Shtromandel, the president of Greenwich Street Equities, which is the developer behind the Union Street Hotel and Gowanus Inn & Yard, there are currently a total of 800 hotel rooms in Gowanus.
Globiwest Hospitality, the developer behind Hotel Le Bleu is constructing a six-story, 58-room hotel on an empty lot at 399 Third Avenue between Third and Sixth Streets. And, Greenwich Street Equities’ five-story, 76-room Gowanus Inn & Yard, which is located at 645 Union Street between Third and Fourth Avenues, is set to open later this year. Developer Sam Boymelgreen is contributing to the boom and has filed plans to develop a seven-story, 162-room hotel at 255 Butler Street, also between Third and Fourth Avenues. A 13-story, 176-room hotel is being developed by Miriam Chan a block away at 576 Baltic Street, while RJ Hospitality has plans to construct a five-story, 101-room hotel at 529 President Street. Both projects sit between Third and Fourth Avenues.
These are incredible developments for the area—and for the borough. “People have started coming to Brooklyn solely to visit Brooklyn,” said Justin Fitzsimmons, a research analyst at GFI Capital Resources. “But [land] prices in Brooklyn are going up and these prices are driving the outer-borough hotel boom. Areas like Gowanus offer a cheaper alternative and are not quite there yet.”
Nightly room rates in Gowanus average around $159 to $179—a significant dip from hotels in the hotter areas of the borough where the average is closer to $245, according to Booking.com
Fitzsimmons said hotel development in Gowanus has been coming in waves. The first included large chains like Holiday Inn Express and Fairfield Inn & Suites by Marriott. Today, the second wave is more niche and boutique, with the likes of Hotel Le Bleu, Union Hotel and the upcoming Gowanus Inn & Yard, which, in his opinion, should fare well because the high rates match the neighborhood’s style.
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