National Harbor Hotel Developer Is Unfazed by Gloom

Monday, January 26, 2009

Jon Peterson's timing doesn't seem to be ideal.

Two years ago, the son of longtime Washington area developer Milton Peterson started the construction of a boutique hotel at his father's massive National Harbor project in Prince George's County. Now, with the economy in the tank and a dim outlook for the hospitality industry, the 190-room hotel is set to open at the end of March.

But he says he's not too worried.

"The hospitality market was in a stronger state two years ago when we started construction on this hotel," Jon Peterson said of the $48 million project. "We are confident this hotel will do well because of all that National Harbor has to offer, including the vibrant restaurant, retail and waterfront."

Jon Peterson's partners in the deal include Vann Avedisian, who was his roommate at Middlebury College in Vermont. Avedisian is the co-founder of Oxford Capital Partners, a private-equity real estate investment firm in Chicago.

The Aloft hotel, which is similar to Starwood's boutique W hotel brand, will have a spa and restaurant. It will be the fifth hotel at the National Harbor project, after the 2,000-room Gaylord National Resort & Convention Center and a Westin, Hampton Inn and Residence Inn. National Harbor also includes a sprawling complex with an office building, condos, restaurants and shops, with plans to build an additional 5 million square feet.

Gaylord Entertainment said earlier this month that its same-store revenue at its resorts fell 5.4 percent in November as its group business declined. Revenue at its National Harbor site was $16.1 million in November, with 56 percent occupancy. In December, the hotel's revenue was estimated to be $12.8 million, the company said.

Aloft's opening at National Harbor is part of Starwood's plan to expand the franchise. There are 17 Aloft hotels, including one at Dulles International Airport, in the United States and overseas. More than 100 Aloft hotels are expected to open in the next few years, including one at Baltimore-Washington International Marshall Airport, one at Arundel Mills Mall and another at Dulles.

-- Dana Hedgpeth

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