Skip navigation

HOTEL & RESORT NEWS

Jones Lang LaSalle Hotels predicts global hotel market will rebound

Although the effects of the Sept. 11 terrorism attacks reverberated across the global hotel markets, a recent report by Sydney, Australia-based Jones Lang LaSalle Hotels predicts the industry is poised for long-term financial success.

“The hotel sector will recover as it has done in the past, and these investors will enjoy considerable capital and income appreciation in the medium to long term,” said Nick Marsh, executive vice president of investment sales at Jones Lang LaSalle Hotels.

However, access to capital will remain a critical factor in hotel investment. “Market uncertainty will be priced into hotel transactions as investors adopt differing assumptions as to their expectations for recovery and growth.”

The U.S. hotel market was devastated in the weeks immediately following the Sept. 11 attacks, with revenue per available room (RevPAR) plunging 37.3% in the first week. However, the U.S. hotel industry has posted a “slow and painful recovery” since then, according to Arthur de Haast, managing director at Jones Lang LaSalle Hotels in London.

Continental Europe has been somewhat more removed and distanced from the conflict, and hotels with strong domestic demand have been insulated from the fallout. “However, hotels with a high exposure to U.S. demand are feeling the cutback in international travel,” de Haast added. “In Asia, economic vacillation has driven a fall in hotel performance ratios.”

The global investment community has reacted to the terrorist attacks in different ways. “It appears that deals in Europe and Asia Pacific are on track, although prices have softened slightly,” Marsh said. “This compares to the U.S. where investors are adopting a ‘wait- and-see’ stance.”

La Quinta Inns crosses the border into Canada with AFM Hospitality

Dallas-based La Quinta Inns is expanding across the border to Canada after a 33-year exclusive presence in the United States. La Quinta has signed a master franchise agreement with Toronto-based AFM Hospitality Corp.

AFM Hospitality will have exclusive rights to franchise the brand in Canada through its subsidiary, La Quinta Inns Franchises Canada Inc. AFM Hospitality expects to develop more than 30 franchised La Quinta properties throughout Canada during the next five years.

AFM Hospitality, which is the largest multi-brand franchiser in Canada, now franchises 10 different hotel brands with the addition of the La Quinta flag.

Blackstone Real Estate purchases Homestead Village for $740 million

Blackstone Real Estate Advisors has purchased Homestead Village, an extended-stay lodging company, from Santa Fe, N.M.-based Security Capital for $740 million. The transaction included $480 million in cash, the assumption of $145 million of liabilities and a $115 million note issued to Security Capital.

Security Capital officials said the sale was part of a divesting strategy to exit businesses that do not fit the company's current strategy and to focus on six private real estate operating divisions. The company currently has 10 operating real estate divisions.

Blackstone Real Estate Advisors is an affiliate of The Blackstone Group, a private investment bank with offices in London and New York. Salomon Smith Barney served as financial advisors to Security Capital. New York-based Bear, Stearns & Co. advised Blackstone and provided the mortgage financing for the transaction.

Trump snags Hotel Delmonico in Manhattan for $115 million

Donald Trump has signed a contract and put down a deposit of more than $5 million to acquire the Hotel Delmonico in Midtown Manhattan. With his offer of $115 million, Trump won the right to buy the landmark property in a bid between 12 buyers who submitted binding proposals. The transaction signals that there are still many investors looking for trophy properties to purchase in New York, said Mark Gordon, head of Sonnenblick-Goldman Co.'s International Lodging and Leisure Group. Gordon represented the seller, 502 Park Ave. LLC. “We're finding there's really significant equity capital chasing the deals in the market,” he said.

In its heyday from 1924 to 1934, the Hotel Delmonico served as one of New York's most prominent hotels. The 72-year-old property currently serves as a working hotel. Although Trump hasn't finalized his plans for the building, Gordon said the real estate mogul is considering alternative uses such as converting the building back into residences.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish