Briefs: Hersha sells West Coast assets; Tempo by Hilton to NYC

Hersha sells West Coast assets: Hersha Hospitality Trust, Philadelphia, Pennsylvania, has agreed to sell to West Coast properties, the 153-room Pan Pacific Seattle and the 121-room Hotel Milo Santa Barbara, for gross proceeds of US$125 million (US$455,000 per key). Hersha intends to use the proceeds from the sale to pay down approximately US$45 million of debt and expects to utilize the remainder for general corporate purposes. The price implies a blended 2.9% cap rate and 27.0x EBITDA multiple on 2019 results. Hersha also disclosed that the 150-room Gate Hotel JFK (leasehold interest) is held for sale as well; no pricing was disclosed. “The valuation of these two assets is yet another confirmation of the public-to-private market valuation gap for our portfolio, and we believe pricing on these two assets is more representative of the remaining portfolio than prior dispositions,” said Hersha’s CEO Jay Shah.

Rendering of Tempo by Hilton Times Square in New York

Tempo by Hilton to launch in New York City: Hilton has signed the 661-key Tempo by Hilton Times Square in Manhattan, slated to open in 2023. Owned by L&L Holding Co. and Fortress Investment Group, and managed by Hilton, the lifestyle hotel is located at TSX Broadway, the new 46-story hospitality and entertainment destination that will also house TSX Entertainment, a newly-launched entertainment company. The 36-story hotel will be designed by WATG and Mancini Duffy and include an 11th floor open sky lobby with communal and working spaces. Currently, there are around 20 Tempo by Hilton properties under development.

Marriott to open in Tucson high rise: Opwest Partners, Scottsdale, Arizona, has partnered with Tucson, Arizona-based Iridius Capital to open a soft branded lifestyle hotel within the 23-story One South Church building in early 2023. One South Church is a mixed-use project comprising a 145-room boutique hotel, restaurant, residential units and office space. The building’s first nine floors are being renovated into The Leo Kent, a Marriott Tribute Portfolio Hotel, and the upper floors have been upgraded and will continue to operate as office space. The project is part of the Rio Neuvo District Project, which aims to reenergize Tucson into a hotspot for tourists and residents.

Radisson grows in Poland: Radisson Hotel Group has announced plans to grow its portfolio in Poland. Radisson Blu Resort & Conference Center, Ostroda will open in 2023, while Radisson RED Krakow and Radisson Apartments Krakow will open in summer 2023. The Krakow properties will be a part of the Unity Centre business complex in the city. The group plans to open an upper upscale resort on the Baltic coast with Radisson Blu Resort, Miedzywodzie in 2024. Radisson Resort & Suites Ustronie Morskie will be the company’s 23rd property in Poland and its eighth resort. The group currently has a portfolio of 23 hotels, totaling over 5,200 rooms under six brands, in operation and under development in the country.

China’s lockdown policy to delay recovery: Air travel is not expected to make a full recovery before 2025 or 2026 due to China’s continuing travel-hampering “zero-COVID” policy, said AeroDynamic Advisory. International air travel or intra-regional air travel is not unlikely to return to 2019 levels until 2026, he said. However, domestic air travel will fully recover to pre-pandemic volume by the middle of the next year. Citing lockdowns in China, rising energy expenses, labor shortages and inflation, the Global Business Travel Association in August changed its expectation of the global business travel sector’s full recovery to 2026 from 2024.

Grand Hyatt Seoul sells: Seoul Mirama Co., Ltd., Seoul, South Korea, the owner of the site and building of Grand Hyatt Seoul Hotel, has signed an MOU for the hotel’s sale. Blue Cove asset Management will be acquiring the hotel for over KRW1 trillion (US$724 million). In 2021, Seoul Mirama sold the parking lot of the Grand Hyatt Hotel for KRW200 billion (US$144 million).

Grupo Xcaret announces new hotel: Grupo Xcaret, Cancun, Mexico, has announced the construction of a new hotel which is expected to open along the coast of Riviera Maya in 2025. The group already has three hotels operating across Quintana Roo and this fourth property will add more than 1,800 suites.

R&F Properties selling Beijing hotel: Guangzhou R&F Properties has agreed to sell the 310-key Wanda Realm Beijing hotel to a unit of Beijing Pengrui Real Estate for RMB550 million (US$79.34 million). A unit of R&F, which incurred a net loss of RMB6.9 billion (US$1 billion) in the first half of 2022, is selling its 100% stake in the hotel to Beijing Yingxie Property Investment Co. Ltd. The company will use the proceeds of the sale to repay debt. The deal was announced days after R&F said it was repurchasing a project in London which it had sold to Hong Kong’s Far East Consortium in March for £95.7 million (US$110.91 million).

Queen’s death sparks demand for London hotels: After the death of Queen Elizabeth II last week, London is set to see a rise in demand for hotels as visitors flock to the city to pay their respects to the late monarch. With an influx of dignitaries, media and people, London is expected to see strong demand for accommodation during the 10-day national mourning period, estimated STR. Large crowds are expected to gather at Buckingham Palace and other Royal Residences ahead of the funeral. Users on social media have observed increasing prices of some hotels in London.

WLT gets approval for Brookfield’s acquisition: Watermark Lodging Trust, Chicago, Illinois, has announced that the proposed acquisition of WLT by private real estate funds managed by Brookfield has been approved by stockholders. WLT common stockholders will receive cash consideration of US$6.768 per Class A share and US$6.699 per Class T share. The transaction is expected to close on October 21 but remains subject to the terms and conditions of the merger agreement.