BETHESDA, Maryland—2012 should be an active year on the transactions side for Host Hotels & Resorts, executives said during the company’s fourth-quarter earnings call Tuesday.
Ed Walter, president and CEO of Host, said the real-estate investment trust has plans to sell between US$100 million and US$115 million worth of assets during the first half of the year.
“Over the next two or three years, we expect to be an active recycler of capital,” Walter said during the conference call with analysts.
Macroeconomic volatility has slowed the sales pace for the properties Host is marketing, but Walter predicted it will increase as the economy continues to improve.
One market Host wants to reduce its exposure to is Atlanta. “We just don’t see the long-term growth there,” he said. Other markets targeted for sales are U.S. West Coast locations near airports and in the suburbs, as well as areas where the sector has seen a recovery in earnings before interest, taxes, depreciation and amortization.
Owners/operators and private acquirers are the most likely buyers of the assets, Walter said.
Looking for deals
Host isn’t looking to be just a pure seller in this market, Walter said. The company also wants to put the proceeds from its hotel sales to work in acquiring other properties. Host owns 121 properties globally, comprising approximately 65,000 rooms.
“Based on the improvement in economic conditions, we expect to see transactions pick up in 2012, particularly during the second half of the year,” Walter said.
He added, “We are pleased to say the lodging recovery is continuing to progress. We believe this positive cycle will continue in 2012.”
The company saw some of this progress during the fourth quarter, as comparable hotel revenue per available room increased by 5.9%.
Most of the acquisition deals Host strikes this year will be in the U.S., particularly the West Coast, Miami, and Washington, D.C., Walter said. “We will be very careful and cautious in Europe.”
That said, Host could look beyond U.S. boarders for deals. Walter mentioned Singapore as one potential market where acquisitions could be made for the company.