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ATLANTA-Locally based NYLO Hotels LLC is expanding its young brand of affordable urban-loft lodging through franchise agreements with developers in Dallas, Chicago and New York City. The franchisees were announced at this week’s Americas Lodging Investment Summit in San Diego, which was covered by GlobeSt.com.

John Russell, CEO of NYLO Hotels, says the franchise agreements allow the chain to continue growing despite ongoing difficulty within the hotel industry. More than 40 sites are in the chain’s pipeline, with NYLO Providence/Warwick (RI) opening last fall and the 200-room NYLO Dallas/Las Colinas set to open in the third quarter.

“It’s a way to grow your company more quickly because you’re using other people’s money,” Russell tells GlobeSt.com. “They pay you for your brand, reservations and marketing. That has always been the plan after we built the first few ourselves.”

Chicago-based W Developments LLC will build NYLO Chicago/West Loop, a 179-room full-service hotel near the city’s central business district and convenient to both its airports. The seven-story structure will feature a rooftop restaurant and bar along with numerous other amenities, and will feature original music and artwork by local artists.

Sentry Hospitality Ltd. will develop NYLO’s first New York City location. The 130-room, seven-story NYLO Manhattan will be located in the city’s Financial District adjacent to South Street Seaport, convenient to numerous office buildings, stores and attractions.

Behringer Harvard is building a select-service XP by NYLO with 127 rooms that will join the chain’s two full-service hotels in the Dallas area. The hotel will be part of Frisco Square, a 147-acre master-planned development on the city’s north side. The four-story, 52,294-square-foot hotel will feature a lobby with 20-foot ceilings.

NYLO Hotels, which opened its first location in 2007, shifted expansion into high gear last August upon hiring industry veteran Charles Armstrong as senior vice president of franchise development. Armstrong notes that the cost to build one of its hotels, ranging from $11 million to $24 million, is roughly 30% to 40% less expensive than other traditional full-service hotels.

Russell adds that financing for new boutique hotels is more easily attainable at this scale, especially for affordable accommodations geared toward business travelers in secondary markets. “There are windows of opportunity for the right concept at the right location and the right construction price,” he says.

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