Atlanta Business Chronicle - March 9, 2012 - by Amy Wenk, Staff Writer
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Buckhead’s The Mansion on Peachtree fell into foreclosure not just because of the Great Recession.
The luxury hotel and condo tower also failed to establish an identity.
"I think a lot of people were confused about what The Mansion on Peachtree even was," said Robert Boulogne, chief operating officer for Rosewood Hotels & Resorts. The Texas-based company has managed The Mansion since it opened in May of 2008.
"We really never were able to establish our brand," he said.
Rosewood will end its contract to manage The Mansion at the end of April. It will be replaced by Mandarin Oriental Hotel Group, according to a source familiar with the deal.
Boulogne said the original owners — including Atlanta developer John Williams, founder of Post Properties Inc. — were not interested in calling the hotel The Rosewood Atlanta as was suggested. The Rosewood brand wasn't used to market the residences either.
"Between the confusion in the marketplace and the uncertainty of the building, it left us in a very difficult position to manage that asset," Boulogne said. "It was out of our hands completely."
Boulogne confirmed his company is leaving Buckhead but declined comment about the new operators.
"I'm very, very proud of the work we did," he said. "Atlanta is a great market."
It's the second big change in recent weeks at The Mansion, perhaps signaling a new day for the 42-story tower.
Atlanta Business Chronicle first reported Feb. 24 that a new restaurant concept called Del Frisco's Grille is close to a deal to open its first Atlanta location at The Mansion.
The Mansion should begin transitioning to the Mandarin brand at the end of April.
It could be a fresh start for the property, according to local hotel and real estate experts.
"I think sometimes change is good," said Paul Breslin, the managing partner of Panther Hospitality LLC, a hotel consulting firm. He said the Mandarin brand has a "greater following and greater reach" than Rosewood.
The Hong Kong-based company operates, or has in development, more than 40 hotels in 26 countries, according to its website.
Mandarin's move into the South, "reflects Atlanta's growth as an international destination as Mandarin Oriental hotels are exclusively located in international gateway cities in the Americas," said Kim Bardoul, a hotel consultant with The Highland Group.
The brand "screams service," said Mark Vaughn, executive vice president for the Atlanta Convention & Visitors Bureau.
Vaughn said he sees the hotel brand as "almost a marketing arm for us" to attract tourism and conventions.
"It's an honor to be associated with a global brand," he said.
Mandarin couples "21st century luxury with oriental charm," says the company. Hotel design strives to reflect the community. Mandarin properties typically offer holistic spas, creative dining options and guest-centered technology.
"I think they have a pretty strong following, both in business and pleasure," said Steve Baile, senior vice president in the Atlanta office of Daniel Corp. , which collaborated with Selig Enterprises Inc. on the high-end 12th & Midtown development.
Mandarin has spent five years trying to come to the South.
The hotel group first announced its plans for Atlanta in March 2007. The company the same year moved its U.S. development offices to Midtown, opening an around 7,000-square-foot office on 10th Street.
"The environment was a lot different then," Baile said. Demand in the local market at that time supported new hotel construction, he said.
Atlanta-based Tivoli Properties Inc. in late 2008 set out to develop a 53-story hotel and condo tower in Midtown under the Mandarin flag. The plan was to build on a 1-acre parcel along Peachtree Street, near the intersection of 14th Street.
But the site slated for the $285 million project was foreclosed upon in February 2010.
That same month, The Mansion returned to its lender.
Mandarin also was a brand consideration for the St. Regis Atlanta when Tavistock Group acquired the property in March 2011.
Mandarin declined to comment on its recent commitment to The Mansion. The property's owner, iStar Financial Inc., also declined comment.
"Their choice to enter the Atlanta market now with an acquisition reflects the post-recession hotel market recovery, which is being led by the luxury segment," Bardoul said.
R. Mark Woodworth, president of PKF Hospitality Research, said the current market doesn't support new hotel construction. The focus now is on rehabbing existing properties.
"Market fundamentals won't support the construction of upscale or luxury hotels," Woodworth said.
Perhaps that's why Buckhead scored the Mandarin brand, instead of Midtown.
"I think it's a good move for Buckhead and the city," said David Allman, owner and chairman of Regent Partners LLC, which is developing a new mid-rise building on Peachtree near Tower Place.
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