/ / / /

More Bad News for the 1 Hotel Seattle

June 25, 2008 at 10:19 AM | by | Comments (3)

Things aren't going too well for the 1 Hotel Seattle.

If things weren't already bad enough for Barry Sternlicht's Seattle baby, Avalon Holdings (a significant partner and the original developer of the hotel) has sold its entire interest in the project to Starwood Capital.

As our resident Starwood stalker, AndrewC, reported in late February, the hotel had been encountering significant problems during development most likely due to the credit crunch.

Supposedly due to unfavorable construction financing terms, the 1 Hotel had redesigned its project structure in February by converting the slow-selling condos into additional rooms. In fact, according to Avalon Holdings, only 25 condo-suites had been sold through February -- and they were planning to sell 176. Yikes.

But Starwood Capital claims the project is still going to be developed in the near future, and they now have complete control since they own 100% of the project.

Admirably, Starwood's Vice President of Asset Management, Dan Schwaegler, maintains his confidence in the Seattle project. He told the Post-Intelligencer:

"We believe that Seattle is the perfect location for a 1 ecologically focused hotel and residential project, and know it will not only be successful, but also a welcome addition to the Seattle landscape."

Although the Seattle 1 Hotel seems like a really great and unique addition to the city's hotel scene, the hotel has a lot to overcome. Years of development, a need for plenty of financing, and a struggling economy will definitely not help the project.

It just shows us that no matter who you are these days -- even if you're Hotelier Extraordinaire himself Barry Sternlicht -- you can encounter major development obstacles.

Comments (3)

Post a Comment

Re: More Bad News for the 1 Hotel Seattle

I think this is actually great news - now that Starwood is taking over 100%, the party holding up the project (Avalon) is now out of the picture. So now hopefully its full speed ahead!

Re: More Bad News for the 1 Hotel Seattle

You could be right Andrew. But I'm a little more pessimistic on the prospects of Starwood going solo without the original developer of the building. They definitely do not usually do this.

Re: More Bad News for the 1 Hotel Seattle

Very true, it is currently the only Starwood Cap project under development where they do not have a development partner, but its not as though Sternlicht & Co do not have experience in building hotels.

Time will tell.

But I think they are very vested in seeing this one through due to its being the initial 1 Hotel ever announced.

Join the conversation!

Not a member? .