Hospitality

Hilton to Spin Off Real Estate into 70-Property Hotel REIT

by Nellie Day February 29, 2016

MCLEAN, VA — Hilton Worldwide (NYSE: HLT) has announced plans to spin off the majority of its real estate business into a publicly traded REIT. The company also plans a second spinoff, putting its Hilton Grand Vacations timeshare business into a third publicly traded company. The company hopes the spinoffs will help focus Hilton Worldwide’s model on its core business. “The transactions we announced today will result in three pure-play companies, enabling dedicated management teams to fully activate their respective businesses,” says Christopher Nassetta, president and CEO of Hilton Worldwide. “We intend to have the appropriate leadership, strategies and capital structures in place to set up all three companies for further success.” If approved by the Securities and Exchange Commission (SEC), Hilton’s new REIT will include about 70 properties and 35,000 rooms, comprising one of the largest and most geographically diversified publicly traded lodging REITs. The REIT’s portfolio will contain luxury and upper-upscale assets in high-barrier-to-entry urban and convention markets, top resort destinations, select international regions and strategic airport locations. The new timeshare company will contain nearly 50 club resorts in the United States and Europe. The company will have a long-term license agreement with Hilton Worldwide to market, sell …

February 29, 2016

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Is the Current Bull Run for Chicago’s Hotel Sector Nearing an End?

by Christina Cannon February 4, 2016

The hotel industry has gained momentum over the last few years, with impressive increases in revenue per available room (RevPAR) and a continuing development boom in virtually all major markets across the Midwest and the nation. In the Chicago hotel market, RevPAR increased 7.2 percent in 2014 on a year-over-basis, according to STR Inc., and RevPAR was up 7.7 percent through the first 11 months of 2015. With consumer demand so strong and the development pipeline quite active, it might feel like the challenges of the last recession are long in the past. The reality, however, is that in a cyclical market the next downturn is never too far away. There are some indications that the ride may be slowing down and that the good times the region and the industry have enjoyed in recent years may be coming to an end. Oversupply Concerns While Chicago’s construction pipeline is smaller than a number of other metropolitan areas, it is the Windy City’s most robust development pipeline in recent memory. In aggregate, there will be a 20 percent increase in the room supply over three years. That could easily balloon to 25 percent with projects recently announced. This is very likely …

February 4, 2016

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Carey Watermark Investors 2 Buys Seattle Marriott Bellevue

by Nellie Day January 25, 2016

BELLEVUE, WASH. — Carey Watermark Investors 2 has acquired the 384-room Seattle Marriott Bellevue for an undisclosed sum. The 17-story hotel is located at 200 110th Ave. NE. The property opened in July 2015. It includes 21,000 square feet of meeting and event space, a food and beverage outlet, lounge, fitness center and business center. “The opportunity to acquire a recently developed, high-quality urban asset in the Pacific Northwest is a unique opportunity to expand our portfolio into a vibrant growing market,” says Michael Medzigian, the REIT’s CEO. “The acquisition allows us to invest in an attractive location in one of the fastest growing regions of the country, while providing CWI 2 the opportunity to geographically diversify its portfolio.” The hotel will remain under the management of HEI Hotels & Resorts. It is the only full-service Marriott product in the Bellevue market. It is also nearby to two future East Link light rail stations. Bellevue, located approximately 10 miles east of Seattle, is in the midst of a tech boom. The city is home to notable employers such as T-Mobile, Verizon, Eddie Bauer, Puget Sound Energy and PACCAR. Microsoft currently occupies more than 1.1 million square feet of office space …

January 25, 2016

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Marriott International Agrees to Buy Starwood Hotels & Resorts for $12.2B

by Nellie Day November 16, 2015

BETHESDA, MD. AND STAMFORD, CONN. — Marriott International (NASDAQ: MAR) has agreed to buy Starwood Hotels & Resorts Worldwide (NYSE: HOT) for $12.2 billion. The acquisition will create the world’s largest hotel company with 30 brands under its belt. The combined company will tout 1.1 million rooms in more than 5,500 hotels throughout more than 100 countries. The fee revenue for the 12 months that ended Sept. 30 totaled more than $2.7 billion across both companies. Efficiency, savings and growth are the three main goals behind the merger, according to Marriott. The company expects to deliver at least $200 million in annual cost savings in the second full year after the transaction has closed. It is attempting to accomplish this by leveraging operating and general and administrative (G&A) efficiencies. Marriott also plans to accelerate Starwood’s growth by leveraging its worldwide development organization, as well as its owner and franchisee relationships. “The driving force behind this transaction is growth,” says Arne Sorenson, Marriott’s president and CEO. “This is an opportunity to create value by combining the distribution and strengths of Marriott and Starwood, enhancing our competitiveness in a quickly evolving marketplace.” Per the agreement, Starwood shareholders will receive 0.92 shares of …

November 16, 2015

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LOTTE Group Buys New York Palace Hotel for $805M

by Nellie Day August 31, 2015

NEW YORK — The LOTTE Group has purchased the 909-room New York Palace Hotel in Midtown for $805 million. The hotel is located on the corner of 50th Street and Madison Avenue. It is situated across from St Patrick’s Cathedral. The New York Palace underwent a $160 million redesign in fall 2013. It included new lobbies and specialty suites, 24,000 square feet of refreshed event space and improvements to the property’s restaurants and lounges. The acquisition also includes Villard Mansion, which was originally constructed in 1884. The property runs from 50th to 51st Street on Madison Avenue. It was restored concurrently with the adjacent New York Palace. The New York Palace has been featured on the television show “Gossip Girl.” It has also hosted Tony Award parties, New York Fashion Week events and holiday tree lightings with Miss America. The hotel will be operated by Hotel Lotte Co Ltd, a new company that was formed after the Palace was purchased. It will now be known as Lotte New York Palace. The LOTTE Group is one of the largest Korean conglomerates. Its revenue in 2013 was $74 billion. This acquisition marks the largest single American asset acquisition by a Korean company, …

August 31, 2015

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Summit Hotel Properties Buys Two Residence Inn by Marriott Hotels for $56.8M

by Nellie Day July 27, 2015

BALTIMORE, M.D. AND BRANCHBURG, N.J. — Summit Hotel Properties (NYSE: INN) has acquired two Residence Inn by Marriott hotels for a total of $56.8 million. The acquisition includes the 141-guestroom Residence Inn in Hunt Valley, just outside Baltimore, and the 141-guestroom Residence Inn in Branchburg, N.J. “We are very happy to announce the addition of these Residence Inn hotels to our portfolio,” says Daniel Hansen, president and CEO of Austin, Texas-based Summit Hotel Properties, a publicly traded REIT. “We remain very positive on the current state of the lodging cycle and see these two acquisitions as solid contributors to our long-term growth plan. Both of these acquisitions are located in strong markets that fit well with our growth strategy and portfolio of premium select-service assets.” Summit plans to spend about $1.5 million on capital improvements at the Hunt Valley property, which is situated just 18 miles outside of downtown Baltimore. Notable employers in the area include PayPal, eBay, McCormick Spice Co., Men’s Warehouse and Johns Hopkins University. The company will spend an additional $1.1 million on capital improvements at the Branchburg property, which is located about an hour outside of New York City. Notable employers in the area include Johnson …

July 27, 2015

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Center City Philadelphia to Receive Dual-Branded W, Element Hotel

by Nellie Day June 22, 2015

PHILADELPHIA — Chestlen Development and Vine Street Matthews have announced plans to bring a dual-branded W and Element property to Center City Philadelphia. Starwood Hotels & Resorts Worldwide will operate the 755-room hotel. The Element Philadelphia will feature 460 rooms and a 6,392-square-foot sky lobby. It will include a separate arrival lobby on Chestnut Street with elevator access to the main second-floor lobby, which will contain a 1,400-square-foot breakfast and lounge area, a 1,600-square-foot fitness center and 560 square feet of branded meeting space. The W Philadelphia will feature 295 rooms, a 2,900-square-foot spa, a 3,505 square-foot outdoor pool and deck, a 1,590-square-foot pool bar and a 2,974 square-foot garden area. The 51-story project will also include about 1,731 square feet of street-level retail and three levels of below-grade structured parking. It will be situated directly across from Philadelphia City Hall. The nearby Pennsylvania Convention Center is undergoing a $786 million expansion. Construction began on the project earlier this month. It is slated for completion in the first quarter of 2018. The development will be built by Tutor Perini Corp. Cope Linder Architects is the project designer. Vine Street Matthews is a joint venture between Matthews Southwest and Vine Street …

June 22, 2015

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Paramount Lodging Arranges $8M Refinancing Loan for Hyatt House

by Jeff Shaw June 15, 2015

SCHAUMBURG, ILL. — Paramount Lodging Advisors has arranged $8 million in refinancing for the 134-room, six-story Hyatt House hotel in Schaumburg. An undisclosed large regional bank was the lender in the transaction. Atira Hospitality, which operates the hotel, is currently implementing a substantial capital improvement plan that will include upgrading all rooms, corridors and first-floor public space.

June 15, 2015

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Laurus Completes $10M Renovation to Hilton Kansas City Hotel

by Danielle Everson May 11, 2015

KANSAS CITY, MO. — Laurus Corp. has completed a $10 million renovation on the Hilton Kansas City Airport Hotel. The property is located at 8801 NW 112th St. All 347 guest rooms and guest bathrooms saw renovations including new carpeting, stonework and modern artwork. All three ballrooms include 21,000 square feet of total meeting space and the largest meeting room accommodates up to 700 people in a theater-style setting. The newly renovated indoor/outdoor pool and lounge is designed to create an oasis for guests to relax and unwind. In addition, the restaurant and bar was revamped and now operates as Asado Grill. Surrounded by more than 6 million square feet of office space, including several Fortune 500 companies, the hotel offers proximity to shopping, dining and other entertainment venues.

May 11, 2015

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Rising Popularity of Boutique Hotels Fuels Downtown Detroit’s Lodging Growth

by Danielle Everson May 7, 2015

One of the biggest stories in the hotel industry today is the growth of the boutique segment. Independent groups such as Ace Hotels, 21C, Grupo Habita and citizenM registered record growth in the last few years. Meanwhile, all the major brands have incorporated a boutique component. That trend was reinforced last December when IHG purchased Kimpton Hotels & Restaurants. For its part, Hyatt launched Andaz several years ago, and Marriott has rolled out the Autograph Collection, Moxy, EDITION and AC Hotels in the past few years. Even Best Western has unveiled its new urban boutique concept — Vib. I get the following question a lot: “Why should we invest in boutique hotels?” The conventional wisdom among investment funds tasked with finding hotel assets is to look for branded assets in the top five markets that are deemed less risky by pundits. However, some hotel investors don’t realize the substantial RevPAR (revenue per available room) premiums you can get with boutique properties over standard branded hotels. Among boutique properties, we’re seeing RevPAR premiums of 10 to 20 percent — sometimes 50 percent — over traditional hotels (see chart). Boutique hotels have less rigorous brand standards, if any at all, and offer …

May 7, 2015

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