The News: Philadelphia Lands Luxury Hotel

Announcements of major hotel projects have become rare this year, but an October 30th announcement that a $420 million Waldorf-Astoria Hotel & Residences will rise in Philadelphia illustrates that some blockbuster projects are still possible.The 670-foot-tall structure, slated to break ground in January 2010, will contain 175 guest rooms and 136 residences for sale, starting at $1 million. Gatehouse Capital Corp. and Mariner Commercial Properties Inc. are co-developers.Mariner Commercial president & CEO Tim Mahoney and Brook Lenfest acquired the site, at the northeast corner of 15th and Chestnut streets, in 2000, planning to build a 50-story condominium, Mahoney reported. The pair decided, however, that the most economical way to offer a high level of amenities was to combine the residences with a hotel. Mahoney noted that he and Lenfest negotiated with a number of five-star brands, but only Hilton saw potential in the City of Brotherly Love. “Philadelphia is very close to New York, and the Waldorf name is so well known there,” he pointed out.Mahoney also conceded that the scarcity of major hotel announcements could serve as a benefit, fueling less competition for financing. He forecast less stringent lending terms for the sector over the next six to nine months.