Journal-ConstitutionMcClatchy-Tribune Business News
Aug. 25, 2006 - Young developer Beau King is adding another entry in Midtown's race for signature residential development.
In his first venture without mentor Bob Voyles, King has teamed up with Kimpton Hotels for a 230-room luxury Palomar Hotel and 38 condominium units starting at $1 million. This would mark the local debut of a widely respected boutique-hotel chain.
Generally smaller than chain brands, boutique hotels attract upscale guests looking for trendy surroundings.
Bigger properties can't match that fashion appeal, industry experts say, because they have to aim for broader appeal.
King assumed the helm of the development firm headed by his late father, Kim King, last year.
For his first project, he teamed with Voyles for an office expansion at Technology Square, which his father pioneered.
But for this project, he has partnered with Gulch Ventures' Butch Ross and Chip Patterson.
Gulch, an experienced hotel developer, helped structure the $100 million deal.
"We realize we need someone who's kind of been there, done that," King said, "because you can really get burned on these hotel deals."
Georgia State University economist Rajeev Dhawan recently warned that the proliferation of new condo projects in Atlanta could produce a glut of residential property in the slowing home-sales market.
But Dhawan said projects such as the Palomar, which pairs a luxury hotel with a smaller number of equally posh condos, is more marketable.
The million-plus price tag means economic fluctuations have less effect on its target condo buyer.
"At the luxury level, I like the idea, because it is more tailored to the demographic," Dhawan said. "If you want to build something, something like this, in my view, will have more of an appeal."
King said he is mindful of 2006's steady decline in home sales.
But he points out that sales in Atlanta have not been as heavily affected as other cities'.
As for the hard-hit condo market, the disappearing speculators who drove crashing markets like Las Vegas and Miami have not been as active in Atlanta, King said.
Further, the Palomar prices probably will attract residents rather than speculators, he said. "I just don't think 38 units is too much."
The project will rise on an acre lot at 866 W. Peachtree St., now occupied by the low-rise office building that once housed Haverty's headquarters.
Designed by the architecture firm of Smallwood, Reynolds, Stewart, Stewart & Associates, the Palomar will house 38 condos -- four per floor -- beginning on the 17th floor. In addition to "sweeping views" and "a lot of glass," Palomar condos will have 10-foot ceilings, two-piece crown molding, top-of-the-line appliances and hardwood floors.
Atlantan Stanley Ellis created the condos' interior design and options for buyers' custom finishes.
King said he has already sold five of the condo units, which will range in size from 2,000 square feet to 4,000 square feet.
His mother bought one of them, he said.
Boutique hotels popular
Boutique hotels have become popular in Atlanta during the past few years as both independent and chain hoteliers sought unique identities in an increasingly crowded market, industry experts said.
Kimpton, based in San Francisco, usually specializes in converting old properties -- like a post office or office building -- into a guest destinations.
It has hotels in 10 states, Washington, D.C., and British Columbia.
"They are not well known among Atlantans who don't travel, but for those who do, Kimpton is known as a great brand," said Ken Bernhardt, a marketing professor at Georgia State University.
At completion in 2009, the 26-story tower will rival its Midtown neighbor, the Four Seasons Hotel on 14th Street, for contemporary luxury, King said.
A signature restaurant, yet to be defined, will be included in the development.
"The Kimpton brand, when it comes to Atlanta, it's going to blow people away," King said.
Timing may be right Boutiques currently account for less than 5 percent of Atlanta's hotel stock, said Scott Smith, a vice president at PKF Consulting Inc., an Atlanta firm that tracks the health of the hotel industry.
With the city's occupancy rates growing, the timing is right for Kimpton here.
"There is great opportunity in the Midtown area right now, branded or unbranded," Smith said. "If anybody has defined the boutique category, it's Kimpton."
Tim Mescon, dean of the Coles College of Business at Kennesaw State University, said the boutique market overall is having a transforming effect on Atlanta hoteliers.
"I like it because it keeps the legacy properties on their toes," he said.
By Julie B. Hairston and Leon Stafford
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