Nearly US$3.5 billion of hotel assets traded hands during 2011 in New York, a record for the city, according to preliminary data from Jones Lang LaSalle Hotels’ Hotel Intelligence New York report.
Approximately 50% of the transactions were driven by real-estate investment trusts. In a news release, JLLH indicated another heady deals year is expected for New York in 2012 and that the city will remain the most active transactions market in the United States.
“New York transaction activity in 2011 was driven by the perfect combination of strong operating fundamentals, quality product being brought to market and unprecedented REIT appetite,” said Arthur Adler, managing director and Americas CEO of JLLH. “During 2012, REITs have been less acquisitive since their share prices declined in mid-2011, but are continuing to look for opportunities to upgrade their portfolios.”
Highlighting Adler’s point, REIT Chesapeake Lodging Trust on Tuesday announced plans to acquire the 185-room Hyatt Place New York Midtown South for US$76.5 million, or US$414,000 per room. The proposed deal for the hotel, which is under development, is expected to close during the third quarter.
“We are very pleased to announce the definitive agreement to acquire our second hotel in the highly desired midtown area of Manhattan at a very compelling per key price,” James L. Francis, Chesapeake’s president and CEO, said in a news release. “Similar to the Holiday Inn New York City Midtown – 31st Street, which we acquired in late December 2011 and opened on January 19, we expect the Hyatt Place to ramp-up very quickly given the robust demand in Manhattan, the strength of the Hyatt brand, and our operator’s extensive experience managing hotels in New York City. Following this acquisition, approximately 8% of our portfolio’s hotel rooms will be based in Midtown Manhattan."
Chesapeake intends to enter into a management agreement with Real Hospitality Group.
After seeing their performance metrics take big drops in 2008 and 2009, the performance of hotels in Las Vegas appears to be picking up again, reports HotelNewsNow.com’s Jason Q. Freed.
Performance data from the Las Vegas Convention and Visitors Authority through November shows Las Vegas hotels are performing in line with hotels throughout most of the U.S. … that is, they’re recovering steadily but are still short of peak performance numbers.
Year-to-date occupancy in Las Vegas through November was 84.8%, up 3.7% from that same time frame in 2011. The metric that most resembles a recovery, though, is Las Vegas hoteliers’ ability to increase average daily rate 10.8% through November 2011 as compared to year-to-date November 2010.
“If you’re able to maintain occupancy, and you’re able to grow ADR it shows some recovery in the destination,” said Scott Russell, senior research manager at the convention and visitors authority.
An inability to source financing was a common frustration heard from many attendees at last week’s Americas Lodging Investment Summit. HotelNewsNow.com’s Shawn A. Turner reports that a roundtable discussion held during ALIS aimed to help bridge the communication gap between borrowers and lenders.
Regardless of whether you’re looking for a loan or to buy a bank-owned hotel, possibly the best way to get a lender’s attention is to be specific, the panelists said.
David P. Gutstadt, an executive director with Morgan Stanley, said there have been many times that a potential borrower has called his phone and left a general message on his voicemail. Those people don’t get calls back, he said.
“When you’re talking to a bank, you have to remember there are a lot of people knocking on their door,” Gutstadt said. If you want to buy a branded hotel that is bank owned, for instance, explain that you have a good relationship with the brands or that you have a good grasp on what the brand’s standards are, he added.
Travelodge on Tuesday said it plans to invest £246 million (US$388.24 million) in opening 41 hotels, comprising 3,610 rooms, across the United Kingdom during 2012.
Eleven of the new properties are scheduled for London. The openings would boost Travelodge’s portfolio to 537 hotels and more than 39,000 rooms .
"The demand for good quality budget accommodation is growing at such pace across the country that we have added 146 new U.K. locations to our target requirements list,” Guy Parsons, Travelodge’s CEO, said in a news release. “Therefore we can build more hotels in the locations where consumers need them. With our ability to be flexible and innovative in terms of the development schemes we can undertake, we are in a very strong position to achieve our growth target of having 1,000 hotels by 2020."
Compiled by Shawn A. Turner.