In addition to rooms, the Hyatt Regency will have 24 residentialcondominiums, 4,000-sf spa and 13,000 sf of meeting space when itopens in 2011. The hotel is being developed by the Chicago-basedGlobal Hyatt Corp. in partnership with Valhalla Development Groupof Scottsdale. The hotel is part of the 41-acre Hayden FerryLakeside, a SunCor Development Co.-owned mixed-use development at80 E. Rio Salado Pkwy. at Tempe Town Lake.

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Donald Arones, senior vice president in Grubb & Ellis/BRECommercial LLC's Phoenix office, says the area can use afull-service, amenity-heavy hotel like the Hyatt Regency. Althoughthe Tempe Mission Palms at 60 E. 5th St., near the Arizona StateUniversity campus, has been around for awhile, demand for hotelrooms and meeting space has been growing.

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"The studies that have been done over the past couple of yearsindicate a shortage of rooms," Arones says. "A lot of people whowant to stay in Tempe can't so they're going into Scottsdale orPhoenix."

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A Hyatt Regency hotel also is very attractive to future officetenants at Hayden Ferry, says Thomas F. Adelson, executive vicepresident in Phoenix for CB Richard Ellis. "Having a hotel withmeeting rooms and places where out-of-town executives can stay nearoffice space is a huge positive," he tells GlobeSt.com. "It's ahuge positive for office space and a huge positive for retail.There really hasn't been that kind of cool, classy type of hotel inthat particular submarket."

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There had always been a hotel component planned for Hayden FerryLakeside, a mix of office, retail and residential space. Until lastsummer, it was assumed the project would boast Starwood Hotels& Resorts Worldwide Inc.'s Le Meridien brand. But the developerand Starwood parted waysamicably when they realized their development timelineswere very different.

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Arones acknowledges he's skeptical the project will get off theground due to tight credit markets, but likes the fact there is acommitment for a Hyatt Regency in the area. In addition to sendingthe signal that Downtown Tempe is an active area, he says "itprovides a great alternative for people who don't want to payCamelback Road rates, but who want to be in a classy hotel in anactive live-work-play community."

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