240-Key Hyatt Regency to Grace Hayden Ferry

In addition to rooms, the Hyatt Regency will have 24 residential condominiums, 4,000-sf spa and 13,000 sf of meeting space when it opens in 2011. The hotel is being developed by the Chicago-based Global Hyatt Corp. in partnership with Valhalla Development Group of Scottsdale. The hotel is part of the 41-acre Hayden Ferry Lakeside, a SunCor Development Co.-owned mixed-use development at 80 E. Rio Salado Pkwy. at Tempe Town Lake.

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

"The studies that have been done over the past couple of years indicate a shortage of rooms," Arones says. "A lot of people who want to stay in Tempe can't so they're going into Scottsdale or Phoenix."

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

There had always been a hotel component planned for Hayden Ferry Lakeside, a mix of office, retail and residential space. Until last summer, it was assumed the project would boast Starwood Hotels & Resorts Worldwide Inc.'s Le Meridien brand. But the developer and Starwood parted ways amicably when they realized their development timelines were very different.

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