BETHESDA, MD–Marriott International plans to open five new hotels — specifically its select-service brands AC by Marriott and Residence Inn — at retail centers owned by one of the industry's leading retail REITs, Simon Property Group, over the next several years.
The REIT began adding hotels to its retail properties about 15 years ago and now it is stepping up this strategy.
The approach makes sense: retail centers like the traffic that hotels deliver and hotel guests like to be located within walking distance of the dining and entertainment amenities that retail centers are increasingly adding to their tenant mix. Or here's another use case: Such hotels also appeal to locals, who may book a hotel for a special shopping trip – such as a wedding gown hunt, according to Jamie Krueger, director of Sales and Marketing at the AC Hotel Atlanta Buckhead at Phipps Plaza.
In short, the uses are very complementary, said Patrick Peterman, VP of Development and Asset Intensification at Simon, in a prepared statement that refers to Marriott. “We've recognized this for a long time.”
Already, there are more than 15 Marriott-branded hotels located at Simon properties including The Westin at The Domain in Austin, TX, which opened in 2010 and the AC Hotel Atlanta Buckhead at Phipps Plaza, which opened in Atlanta in 2016. Last year the Marriott TownePlace Suites debuted at Coconut Point in Estero, FL.
Under this agreement with Simon, Marriott will be developing the following:
- AC Hotel by Marriott Fort Lauderdale Sawgrass Mills/Sunrise
- AC Hotel by Marriott Miami Dadeland
- Courtyard Marriott Wolfchase Galleria/Memphis
- Residence Inn Long Island Jericho
- Fairfield Inn & Suites Dallas Garland, Texas
According to a recent article in The New York Times, Simon will add 10 hotels to its properties through 2019, up from a total of four in 2016 and 2017. As one example, the Times said that Simon plans to substitute a closing Belk department store at its Phipps Plaza mall in Atlanta's Buckhead district with a 150-room Nobu Hotel and a restaurant, a Life Time fitness gym, and an office building.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
