“Sunstone Plans to Buy $1 Billion of Hotels This Year After Prices Decline” plus 1 more |
| Sunstone Plans to Buy $1 Billion of Hotels This Year After Prices Decline Posted: 13 Jan 2011 01:34 PM PST Sunstone Hotel Investors Inc., the real estate investment trust that's forfeited 10 properties in the past two years, wants to buy $1 billion of assets in 2011 to expand its portfolio of upscale business hotels. The company is looking to buy high-end hotels of 400 rooms or larger in major cities on the U.S. East and West coasts, said Kenneth Cruse, Sunstone's president and chief financial officer. Among the purchases is the 62 percent of Doubletree Guest Suites Times Square it doesn't already own for about $37.5 million. Sunstone plans to complete the New York acquisition this month. "Many deals last year, we spent months and months and months on to analyze the transaction until it essentially moved away from us," Cruse said in an interview yesterday at the hotelier's Aliso Viejo, California, headquarters. "We think going forward we are able to close many deals within two to three weeks." Sunstone, the owner of 32 hotels including the Hilton Times Square, last month said Art Buser resigned as president and chief executive officer after the REIT failed to complete acquisitions. It's seeking to take advantage of declines in property values after a 2009 industry slump that was the biggest since the Great Depression. "As general hotel financing improved over the past three months and will going forward, there is going to be more competition for big deals," said Ben Thypin, an analyst at Real Capital Analytics Inc. in New York. "You want to be buying now, not in two years, when you should probably be selling. But with Sunstone there's even more pressure because they are public and have a responsibility to shareholders to act." Travel Rebound A rebound in U.S. business and leisure travel is buoying the lodging industry. Revenue per available room, or revpar, in the top 25 U.S. markets rose to $76.61 in January through November of 2010 from $71.55 a year earlier, according to Smith Travel Research Inc. of Hendersonville, Tennessee. "It looks as if by 2014 we'll be back where we were in 2000 and 2007," Robert Alter, Sunstone's founder and executive chairman, said during the interview. "It's clear that a lack of supply and improving fundamentals in the economy ought to make the next few years very successful and give us a nice run." Sunstone said yesterday that it expects to report a 5.7 percent increase in fourth-quarter revpar. The company on Nov. 4 forecast revpar would climb 5 percent to 7 percent in the three months ended Dec. 31, compared with a 3.3 percent gain in the previous quarter. Hotel Sales In 2010, a total of 666 hotels sold for a combined $11.6 billion, according to preliminary figures by Real Capital. That's an increase of more than fourfold from 157 hotels that sold for $2.5 billion in 2009. Lodging transactions in the Americas is likely to jump as much as 25 percent this year, buoyed by REITs seeking to deploy cash, Jones Lang LaSalle Hotels said on Jan. 4. "REITs will continue to be big players in hotel investments because they have such low-cost capital," Thypin said. "But in 2011 there'll be a lot more investors out there and a lot more lenders willing to lend. That will lead to a higher transaction volume and higher pricing." During the past two years, Sunstone forfeited eight hotels whose values had dropped below their mortgages to Massachusetts Mutual Life Insurance Co. Two additional properties, including the W San Diego, also were handed over to lenders. Sunstone acquired Miami Beach's Royal Palm hotel in an August foreclosure auction for about $117 million, the REIT's only major purchase under Buser. LaSalle Hotel Properties, a Bethesda, Maryland-based competitor focused on upscale lodging, said in September that it bought a hotel in San Francisco as well as two in Philadelphia for a total of $292.5 million. 'Letting Go' Even as it makes acquisitions, Sunstone wants to sell several hotels that don't fit its core strategy, Alter said. "There are still a few assets we are considering letting go of," he said. Alter -- who once before left retirement to become chief executive officer, after Steven R. Goldman departed to join Hilton Worldwide Inc. in 2008 -- and fellow director Lewis Wolff will take active roles in guiding Sunstone's strategy and acquisitions, the company said last month. To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
| Grove Park Inn executive named chairman of Historic Hotels of America Posted: 13 Jan 2011 03:36 PM PST ASHEVILLE — The Historic Hotels of America Executive Committee has appointed Ron Morin, Vice-President and Managing Director of The Grove Park Inn Resort & Spa, as its new chairman. Historic Hotels of America is a program of the National Trust for Historic Preservation and has identified more than 234 hotels that have maintained their historic architecture and ambience. To be selected for this program, a hotel must be at least 50 years old, listed in or eligible for the National Register of Historic Places or recognized locally as having historic significance. "Ron Morin's experience at Grove Park more than qualifies him to serve in this position," said Craig Madison, President and CEO of The Grove Park Inn Resort & Spa. "Ron knows every aspect of the hospitality business, having spent the last 26 years working his way up through the ranks. His tremendous involvement in so many community causes will also serve him well. We are very proud of Ron." Morin celebrated his 26th year as a member of The Grove Park Inn Resort & Spa family in 2010. Beginning as a line staff employee in food & beverage in 1984, he has worked in many areas of the resort in both hourly and management positions. Morin is responsible for the 512 room resort that sits on 150 acres, and includes a Donald Ross designed golf course. He oversees a staff of almost 1,000 employees in areas as diverse as lodging, retail, food & beverage, golf, sports club membership and a commercial laundry. Morin currently serves as vice chairman of the Buncombe County Tourism Development Authority, and as a member of the North Carolina Restaurant & Lodging Association's Government Affairs Committee and Lodging Issues Council. He is a graduate of Leadership Asheville 23 and a certified rooms division executive with the American Hotel & Lodging Association. Morin lives in Flat Creek with his wife Anna, son Eric and daughter Alexandra. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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