Hotels find prime locations in old offices

Hotels have long been known for making architectural statements with new buildings. Think the Westin Peachtree Plaza or Marriott Marquis in downtown Atlanta.

But increasingly, hotels are using old buildings to make their statements with a historic vibe.

Over the past decade several turn-of-the-century downtown Atlanta office buildings, including the Carnegie, Rhodes-Haverty and Glenn towers, have found new life as hotels, some after spending years abandoned and forlorn.

It’s not just Tiffany windows, gold relief or grand staircases that draw the operators. The main appeal is their location on prominent thoroughfares like Peachtree and Marietta streets, which attract the abundant foot traffic that is critical to a hotel’s survival, experts say.

“Having the right location is key,” Mark Woodworth, senior managing director of consulting firm PKF Hospitality, said. “There’s no question that older buildings with significant architecture are attractive, but it doesn’t make sense if they are not where the customers need to be.”

In addition, historic buildings enable big chains to create one-of-a-kind properties that compete with the boutique hotels that have proliferated in urban areas.

The latest example in Atlanta: Hotel giant Hilton announced in February that it plans to transform the 17-story Candler Building — named for Coke leader and former Atlanta Mayor Asa Candler — into a Curio by Hilton by late next year.

Hilton’s Curio brand includes historic buildings in several U.S. cities.

Office buildings are generally designed as empty shells that can be easily manipulated to fit many configurations, which is why layouts on one floor often don’t match the others in a given building, said Charles Pinkham, vice president for developer Portman Holdings, which redeveloped 11 floors of the 27-floor 230 Peachtree Street building into a Hotel Indigo.

“Office buildings by their nature are built to be reconfigured, which makes them perfect for hotel conversions,” he said.

The hotel options come at a time when metro Atlanta is experiencing a visitation surge. A record 48 million people visited the metro area in 2014 — the latest numbers available — and hotel occupancy hit 72 percent in 2015, up 2 percent over 2014, according to the Atlanta Convention and Visitors Bureau.

National trend

The transformations are part of a national movement by the lodging industry to use the character and charm of an old building to lure customers looking for more than cookie-cutter duplication in their next hotel stay, the experts say.

The Liberty Hotel in Boston, for instance, was a jail for almost 140 years before welcoming guests who stay on their own volition. Hotel Monaco in downtown D.C. started its life as a post office in 1839.

Locally, Residence Inn by Marriott has claimed the 21-story Rhodes-Haverty building, constructed in 1929, as its home, while Marriott recently converted the Carnegie Building, which was known as the Wynne-Claughton Building when it opened in 1925, into a Courtyard hotel.

Costs have run anywhere from $6 million for the Glenn renovations to a little more than $95 million to purchase, renovate and finance the conversion of 230 Peachtree Street, the first in downtown’s Peachtree Center development by legendary Atlanta architect John Portman. The remaining floors in the building will continue to operate as office space.

David Marvin, who transformed the circa 1923-Glenn building into a hotel in 2006, said his team faced mold, asbestos and water infiltration issues, although he said the problems were minimal and that he was pleased with the shape the building was in given that it sat empty for more than a decade.

Mechanical issues

Pinkham said there were issues with mechanical systems, structural beams and some water damage at the 230 Peachtree building. But a contingency fund, a must-have in taking on a large renovation project, handled the problems.

“You have to be comfortable with what you don’t know” in doing a renovation, he said.

The interest in the last decade in such conversions are especially important in metro Atlanta, which has been somewhat late to the game and has fewer opportunities than other competitor cities because of our penchant for overuse of the wrecking ball.

“Atlanta still has a handful of opportunities,” Marvin said, especially among older buildings south of Marietta Street. “Because of the development in the city during the 60s, a lot of buildings got torn down.”

While location is key to the decision to convert, the building has to be able to accommodate a minimum number of rooms per floor and the ceilings have to be able to handle the height of Americans, who are taller than their counterparts in the early 20th Century.

“We look at a lot of these buildings, but they don’t work for a lot of reasons,” John Koshivos, a vice president of franchise development at Hilton Hotels, said, citing room configuration as one of the challenges.

Among the standout features of the Candler Building: original Tiffany windows, a Georgia-white marble staircase, ornamental friezes and hand-carved mahogany elevator cabs.

In addition to converting the Candler building into a 265-room hotel, Hilton also is renovating the Walton Building, a 1917 building that features terrazzo floors and marble stairs, into a 128-room Home2 Suites.

“It’s a great location,” Koshivos said of the Candler Building. “The building has this fantastic history to it. And the character is superb.”

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