Hospitality V Michigan

Here come the hotels: A surge in guest rooms another sign of Detroit's rebirth

Here come the hotels: A surge in guest rooms more signs of Detroit's rebirt,ph01
The Siren Hotel is one of the new boutique hotels that have opened in downtown Detroit.
Here come the hotels: A surge in guest rooms more signs of Detroit's rebirt,ph02
The Evening Bar at the new Shinola Hotel is another hotspot bringing new energy to downtown Detroit.

Hotels are opening in downtown Detroit again. And that is a sure sign that the center of this city is in the middle of a rebirth

Of course, hotel rooms aren’t the only new arrivals in downtown Detroit. Restaurants and retailers are opening in the center of the city, too. Companies are looking for office space in downtown, often moving from the suburbs in the process.

And on summer weekends? Downtown Detroit is filled with tourists, families and walkers, people enjoying the museums, new restaurants and retailers here. Others are walking to an arena to see the Tigers, Pistons or Redwings play.

What’s behind this rebirth? The hoteliers opening rooms here and the brokers who have long sold commercial real estate in Detroit point to a new optimism in the city. Downtown is active again. And while Detroit faces plenty of challenges still, it’s no longer dying.

(EDITOR’S NOTE: For a longer version of this story, including extra commentary from some of Detroit’s top CRE professionals, be sure to check out the May/June print edition of Midwest Real Estate News.)

And while hotels are rarely the focus when it comes to commercial real estate, the opening of several new guest rooms in downtown Detroit has added fuel to this city’s growing success story.

One of these new arrivals is The Siren Hotel, located in the historic Wurlitzer building at 1509 Broadway St. in downtown Detroit. This hotel opened last year, and has since become a favorite for both locals and visitors from across the country.

The 106-room boutique hotel, designed, developed and operated by ASH NYC, features a terra-cotta facade, the trendy cocktail lounge known as the Candy Bar and the eight-seat chef’s counter restaurant Albena.

It’s also a popular spot in town, attracting visitors both from the region and across the country.

Anthony Pellegrino, director of hotels with ASH NYC, said that the time was right for such a venture in downtown Detroit. He said that the story in downtown Detroit today is similar to rejuvenations that have already taken place in urban areas such as Brooklyn, New York, and downtown Providence, Rhode Island.

These areas had been struggling, too, before the right combination of entrepreneurs and residents eager for an urban experience provided them with a boost.

“It was the combination of opportunity, potential energy, convenience and the resilience of Detroiters and newcomers that contribute to the expanding number of hotels and hotel rooms,” Pellegrino said.

Pellegrino said that the addition of new hotels, along with the restaurants and retailers that have arrived here, too, should provide a further boost to the local workforce. The owners and managers behind these new businesses will provide training and support to other professionals. This should create a strong workforce throughout the Detroit region, Pellegrino said.

The influx of new hotels and businesses, though, doesn’t mean that downtown Detroit – and the city as a whole – doesn’t still face challenges. Pellegrino said that the city still must invest in its infrastructure and public transportation options.

He also said that businesses can’t start to pull back now. There is positive momentum in the city today, but if new entrepreneurs don’t continue to target Detroit, it could fade.

“It will be challenging to keep up the momentum unless all businesses, new and old, focus on consistent development of their people and their communities and commit to finding ways to make the city promising to not only visitors, but to its people,” Pellegrino said.

The Shinola Hotel opened its doors Jan. 2, a joint effort between Shinola, a retailer specializing in watches and leather goods, and Bedrock, the real estate firm owned by Dan Gilbert of Quicken Loans.

Construction crews transformed the old 1400 Woodward building, once home to sporting goods and hardware store T.B. Rayl & Co., into a boutique hotel with 129 rooms. 

It’s not just the Shinola hotel building itself, though, that is important to downtown Detroit. The alley behind the hotel has become a draw for retailers and restaurants, too. The alley is an example of an activated alley, one that welcomes businesses and visitors alike.

Business opening in the alley include the Evening Bar in Parker’s Alley; San Morello, the flagship restaurant of the Shinola; The Brakeman, a beer hall; and Penny Red’s, a restaurant serving fried chicken and biscuits.

Dan Mullen, executive vice president of development with Bedrock, said that the hotel has exceeded expetations. Since opening in early January, it’s attracted a steady stream of guests. And Mullen says that he expects business to not only remain strong here but at the other hotels, restaurants and retailers opening in downtown Detroit.

“There is demand for hotel space not only on the boutique side but also on the larger-scale side,” Mullen said. “We love seeing this demand. There is a lot of interest and lot of opportunities still available on the hotel side.”