|By Richard Lee, The Stamford Advocate, Conn.
Knight Ridder/Tribune Business News
Sep. 23, 2005 - HEI Hospitality, the Norwalk-based hotel ownership and operating company, has added one of the nation's most historic hotels to its portfolio with the acquisition of the 174-room Algonquin Hotel in New York City.
The Algonquin, 59 W. 44th St., between Fifth and Sixth avenues, was acquired for an undisclosed amount from Miller Global Properties LLC.
Merritt Hospitality, a subsidiary of HEI, will operate the hotel.
The property may be the most "literary" hotel in the world. Home of The Algonquin Roundtable in the 1920s, the property has played host to many of the world's most illustrious writers and personalities, including Dorothy Parker, H.L. Mencken, Gertrude Stein, Eudora Welty, Tallulah Bankhead, Douglas Fairbanks, John Barrymore, Anthony Hopkins, Tom Stoppard and Helen Hays.
William Faulkner drafted his Nobel Prize acceptance speech at the hotel, and Alan Jay Lerner and Frederick Lowe wrote "My Fair Lady" in Lerner's suite.
"The Algonquin is our first Manhattan property, and marks our fourth acquisition in 2005, with several more pending," said Gary Mendell, chief executive officer of HEI.
"The hotel, built in 1902, has always been on the cutting edge of guest comfort and social awareness," Mendell said. "It was the first leading hotel in New York to receive ladies traveling alone, and the first to have electronic door locks, smoke detectors and air conditioning in all of its rooms.
"The Algonquin is an extraordinary hotel, and our goal is to live up to its past and further enhance its legend."
"The hotel has received more than $11 million in upgrades since 1998 and is in excellent physical condition," he added. HEI plans $3.5 million of additional improvements.
Among its noteworthy spaces, The Algonquin is home to the Oak Room, a cabaret that played a role in advancing the careers of many singers and musicians.
The hotel offers 4,000 square feet of recently renovated meeting space that can hold groups of up to 200 people. It also has a fitness center and a business center.
Cushman & Wakefield was the broker in the transaction.
Acquiring a hotel in Manhattan at this time represents a major move for any accommodations business, said Dennis Gemberling, president of Perry Group International, a San Francisco-based hotel and restaurant consultant.
"It's a nice-size property -- kind of mid-market boutique style. It's easier to fill a boutique hotel in New York City than a large hotel," said Gemberling, adding that the hotel industry is on a strong rebound. "This is the time to get into the hotel business."
Having a hotel like the Algonquin should help HEI attract potential investors, he said.
HEI Hospitality owns and/or operates 26 hotels throughout the United States under such brand names as Marriott, Sheraton, Westin and Hilton.
The Algonquin purchase follows HEI's acquisition of the 351-room Hilton Mission Valley Hotel in San Diego in March.
HEI plans to buy $400 million to $500 million in hotel properties in the next three to five years.
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