Nobu's New Hotel Serves Up Fresh Entrant To Atlanta's Luxury Hospitality Scene

The famed Nobu sushi chain, backed by Robert De Niro, has brought its global brand to Buckhead, along with a luxury hotel designed to compete with the Four Seasons and St. Regis.

The long-anticipated Nobu hotel and restaurant opened for business and held a ribbon-cutting ceremony on Wednesday with Nobu Hospitality CEO Trevor Horwell and Chief Operating Officer Struan McKenzie, who said they have been asked for years to bring a Nobu location to Atlanta, but were waiting for the right time and the right partner.

“Atlanta has transformed so much the last 10 years that it’s such a cool destination for film, for music, for office, for manufacturing and for so many sports," McKenzie said. "[Locals] want something different, something new when you look at the hotels in Atlanta. It's been pretty mundane for a long time, with no disrespect to those hotels."

Nobu announced plans in 2017 to open a hotel and restaurant as part of Simon Property Group's redevelopment of Phipps Plaza. The mall giant razed a former Belk department store to reimagine the luxury mall as a lifestyle center. Simon also developed the One Phipps Plaza office that will be occupied by both Novelis and Goldman Sachs as well as a Life Time Fitness complex. 

Nobu, co-founded by Japanese celebrity chef Nobuyuki "Nobu" Matsuhisa, began life as a high-end sushi and Japanese fusion restaurant chain in Malibu that diverged into the hospitality business more than a decade ago. Today, the chain is co-owned by actor Robert De Niro and film producer Meir Teper.

The Atlanta hotel and restaurant include suites, a rooftop pool and bar, private dining and event spaces and a private sake room. Horwell declined to reveal current occupancy or projected revenue to Bisnow, but he said he expects Nobu Hotel Atlanta to be on par with the city’s other luxury brands. Room rates in Atlanta are listed in the high $300s to start, but prices can scale much higher.

Horwell told Bisnow that the business model of Nobu's hotel brand, which has locations in cities like London; Chicago; Las Vegas; the Greek isle Santorini; Los Cabos in Mexico; and Manila, the capital of the Philippines; is to capture a percentage of the customers projected to dine at the 272-seat Nobu restaurant into overnight guests for the 152-room hotel.

“If we can do 250,000 customers a year in a restaurant, we only need to convert 5, 10% of those customers to stay in a hotel,” Horwell said. “There's no reason why that customer who's paying even an average check for three people — $350, $400-plus isn't able to pay … $500 a night. And that's what's happened."

In that way, Atlanta somewhat stands out of the pack: While the economic engine of the Southeast and growing in prominence on the economic world stage, the city doesn't have the 24-hour vibe found in most of Nobu's other markets. 

But McKenzie said Atlanta has evolved into an ideal location for the hotel and restaurant over the past decade due to a diversity of growing industries. And Horwell said Simon CEO David Simon sold him on the vision for the redevelopment of Phipps Plaza.

"Atlanta wants a Nobu restaurant, first and foremost ... It's taken us time to get here, naturally, and it really comes down to the partner," Horwell said. "We think that Atlanta is a place that will do very well. I mean, even now the restaurant is full, we really just opened it, but we're not coming here for three, four or five years. We've got to stand the test of time."

While Atlanta as a whole is on the rise, Nobu is opening at a time when Buckhead is experiencing a much different dynamic than it had in the past as Atlanta's financial hub. The office market's gravity shifted over the past few years into Midtown, especially with the influx of tech and other companies locating there. 

Through the third quarter of this year, tenants absorbed more than 800K SF of office in Midtown compared to tenants in Buckhead, which saw more than 220K SF of offices vacated during that same period, according to data compiled by Colliers. 

Buckhead also has taken hits for the perception of rising crime and a damaging political battle with activists pushing to secede from the city over the past two years.

Horwell and COO McKenzie said they were unconcerned about that dynamic and believe that Buckhead is the right market for Nobu, which is more of a regional draw than strictly for customers in Buckhead. 

“Even if your office is in Midtown, I don't think that's a long, long journey to really go. I mean, it's not like going in Manhattan from one end to the other," McKenzie said.

Horwell likens the Atlanta market to Chicago for Nobu, and predicted that the Nobu Atlanta Hotel and Restaurant could surpass its hotel and restaurant's revenues in the Windy City. Horwell said Nobu’s Chicago location generates around $20M a year in sales and that the company as a whole handles 5 million customers a year.

“I’m hoping we can do better numbers than Chicago," he said. “This city can do equal to that, plus more. We’re very confident in that.”