This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies.  Find out more here  Close
HPT addresses proposed NH Hoteles investment
March 1 2013

The REIT’s President and COO John Murray said the potential deal could help further the company’s growth, particularly in South and North America.

Highlights
  • HPT has proposed investing $375 million in 10 hotels operated by NH Hoteles.
  • “We haven’t documented the deal or closed any part of it. There’s still a lot of work to be done,” HPT’s John Murray said.
  • The deal with NH Hoteles does not mean HPT has lost faith in the U.S. transactions market, Murray said.
By Shawn A. Turner
HNN contributor

NEWTON, Massachusetts—Hospitality Properties Trust’s President and COO John Murray addressed the company’s recent investment in NH Hoteles during a conference call with analysts Friday morning.

HPT has proposed investing $375 million in 10 hotels operated by NH Hoteles. The Spanish chain is facing €1 billion ($1.3 billion) in debt. Also under terms of the agreement, Chinese tourism conglomerate HNA and HPT will create a joint venture to allow for NH Hoteles entry into the Chinese market under the NH brand and establish a commercial partnership that would “enhance cross-selling opportunities,” according to a statement.

“We are hopeful this becomes a long-term relationship that enables us to enhance our growth, particularly in South and North America,” Murray said during HPT’s fourth-quarter conference call with analysts.

In the deal with HPT, the Spanish group is to sell five hotels totaling 804 rooms in Mexico, Chile, Colombia and Uruguay to the real estate investment trust for $70 million with a 20-year management contract with renewal options.

The two groups also will create a joint venture to acquire the entire ownership of the NH Jolly Madison in New York and renovate and co-manage the 3-star, 242-room property with Sonesta, a NH statement said.

Murray said the deal could close later this year. He declined to disclose specific performance results of the hotels involved in the deal, citing a confidentiality agreement that had been signed in conjunction with the deal.

“It’s just a letter of intent,” Murray said. “We haven’t documented the deal or closed any part of it. There’s still a lot of work to be done.”

HPT sparked the proposed deal with NH Hoteles, Murray said. “It came about over a long period of time,” he said. “There were bankers involved at various points. If I remember right, we approached them.”

Murray said HPT ordinarily would not announce a deal that is still in a due diligence period, but NH Hoteles was planning a release and HPT officials feared such a disclosure would be a violation of selective disclosure rules.

“Because NH Hoteles was planning a release, we felt compelled to do so,” Murray said.

An analyst during the call asked HPT’s executives if the deal meant the REIT believes U.S. hotel deals are no longer attractive.

In response, Murray pointed to recent U.S. hotel transactions HPT has entered into. The company in December acquired the 372-room Clift Hotel in San Francisco for $120 million, excluding acquisition costs. HPT also entered into an agreement in January to acquire a 426-room full-service branded Marriott property in Duluth, Georgia, for $31 million.

He added that HPT intends to continue to be active in the acquisitions market.

“I’m not sure we’re losing faith or unhappy with pricing in the U.S.,” he said.

COMMENTS   Show All
Login or enter a name   Post Your Comment  Check to follow this thread via email alerts (must be logged in)
(4000 characters max)

Comments that include links or URLs will be removed to avoid instances of spam. Also, comments that include profanity, lewdness, personal attacks, solicitations or advertising, or other similarly inappropriate or offensive comments or material will be removed from the site. You are fully responsible for the content you post. The opinions expressed in comments do not necessarily reflect the opinions of Hotel News Now or its parent company, STR and its affiliated companies. Please report any violations to our editorial staff

TRENDING
IHG loses 7 Kimptons in San Francisco
Who should get Starwood’s brands
What business travelers want from hotels
Study: OTAs continue to steal market share
Growing lifestyle segment faces challenges
Starwood Hotels CEO mum on sale rumors
VIDEO
Apple stays true to its core post IPO
MCR pursuing smart hotel development
Deconstructing a guest review
With every great opportunity? A challenge
The time to build is now
LATEST NEWS
Think like a retailer: 4 tips for hoteliers
UK Uber court case might translate to Airbnb
Global hotel pulse: Asia/Pacific news
STR: Airbnb qualified competitor to NYC hotels
Millcraft ditches steel for hotels
Digging to the core of Airbnb's Big Apple data
Contact Us
Hotel News Now
18500 Lake Rd.
Suite 310
Rocky River, Ohio 44116
        
Copyright © 2004 - 2015 Hotel News Now, a division of STR, Inc. All Rights Reserved.   Privacy