When native Atlantans think of the Loews brand, they're typically referring to the former Loews Grand Theater in which “Gone With the Wind” premiered in 1939. But the Loews marquee will be perched on a 414-room luxury hotel, slated to open in the city's trendy Midtown district in April 2010.
The hotel will be part of a $500 million luxury mixed-use project — 12th & Midtown — spanning four city blocks. The project will include 750,000 sq. ft. of Class-A office space, more than 60,000 sq. ft. of retail and 60 luxury residential units. Loews Hotels owns and/or operates 18 hotels and resorts in the U.S. and Canada.
Why Atlanta? For starters, a survey of Loews' most loyal customers found that Atlanta was a top destination. “Atlanta is a very strong market in terms of corporate growth as well as technological growth,” says Glyn Aeppel, executive vice president of acquisitions and development for Loews Hotels. Since 2000, the area population has grown by more than 600,000 to more than 4 million residents.
“Midtown Atlanta clearly has a lack of luxury supply compared to Buckhead, where most of the luxury brands already have a presence,” adds Aeppel. Other luxury hotel developers agree. A 466-room W Hotel Atlanta Midtown is slated for completion next year, and a 304-room Hotel Palomar by Kimpton is scheduled for 2009.
“From the hospitality perspective, when people think about where they want to stay in Atlanta, Midtown will be their first choice,” says Susan Mendheim, president and CEO of Midtown Alliance, a nonprofit economic development association.
The 12th & Midtown project will be located in the Midtown Mile, where the Midtown Alliance led the effort to transform Peachtree Street into a version of's Magnificent Mile. The district is supported with $5 billion in new construction, mainly high-end mixed-use towers. In all, 1 million sq. ft. of new retail space is slated to come on line by 2012.
The Loews Atlanta Hotel is part of the Loews Hotels' plan to grow its chain by 10 to 15 hotels in the next five years. Parent company Loews Corp., based in New York, has assets of $80 billion and generates $22 billion in annual revenues.
The current volatility in the debt and equity markets might give developers pause to undertake such a huge project. But Jack Adler, president of Loews, notes that with hold periods of 10 years and just 65% leverage on properties, the company is sitting in the catbird seat.
Jonathan Tisch, chairman and CEO of Loews Hotels, agrees. “Actually we look forward to moments like this [the credit crunch] where there might be an opportunity for us to buy existing properties or to bring our access to capital to development,” he says.
The company's expansion strategy focuses on major markets. Tisch emphasizes that the benefit of having a flag in Atlanta is that it provides strategic value as a feeder to the firm's five Florida hotels — Miami Beach, three in Orlando and one on Saint Pete's Beach. “Atlanta is a very important market.”