NYC’s Lexington trades: Owner-operator MCR, in a joint venture with Island Capital Group and Three Wall Capital, has acquired the 725-room The Lexington Hotel in New York City for US$185 million (US$255,000/key.) The hotel, affiliated with Marriott’s Autograph Collection, will reopen in August under MCR’s management.
Brookfield buying Selenta assets: Canadian PE fund Brookfield appears to have won the bidding for Spain’s Selenta hotels, finalizing the deal for between €420 million and €430 million (US495 million to US$507 million), according to Ejeprime. Hotels included in the transaction include the Sofia and Expo hotels in Barcelona; Don Carlos, Marbella; and the Mare Nostrum resort in Tenerife. If the deal closes, Selenta will continue to operate the properties under a sale and leaseback arrangement.
JLL secures Four Seasons Miami deal financing: JLL Hotels & Hospitality announced it arranged a US$105 million acquisition financing for the 221-key Four Seasons Resort and Residences located in the heart of the Brickell Business District of Miami, Florida. JLL represented Fort Hospitality Group, a privately held real estate firm led by Nadim Ashi, to secure the floating-rate loan through the lender. Currently, Fort owns the Four Seasons Palm Beach, Four Seasons Ft. Lauderdale and the Four Seasons Hotel at The Surf Club.
Loan arranged for Westin Baltimore: PMZ Realty Capital, a New York-based boutique real estate investment banking firm, has arranged a US$27 million non-recourse loan with a life insurance company for the 260-room Westin Baltimore, Washington Airport — BWI. The loan will be utilized to pay off the exiting mortgage, which had matured. The five-year interest-only loan includes an earnout provision when cash flow returns, which was the first time the lender agreed to this type of provision in a hotel loan, PMZ Realty Capital said.
Finance arranged for Portofino Hotel: Sonnenblick-Eichner Co., the Beverly Hills-based real estate investment banking firm, has arranged US$38 million of interim first mortgage leasehold financing for The Portofino Hotel & Marina, a 161-room hotel in Redondo Beach, California. The five-year floating rate LIBOR-based loan replaces a maturing loan and provides interest carry through stabilization. Sonnenblick-Eichner said they were successful in getting the lender comfortable with the ramp-up of the property to the pre-COVID level as well as the short term remaining on the ground lease.
UK deal pace picks up: UK hotel investment volumes reached £1.70 billion in the first half of 2021, across 59 deals, representing an increase of 135.2% compared to the previous six-month period (July-December 2020), according to the international real estate adviser Savills. While this continues to be below the pre-pandemic, five-year average of £2.43 billion for the same period, the positive momentum demonstrates the robustness of the sector and emphasizes the green shoots that are being seen in terms of the UK hotel investment landscape. Regional UK assets accounted for 56.9% of investment volumes and 78% share of transactions, with Blackstone’s acquisition of Bourne Leisure accountable for a large portion of H1 2021 volumes. Total investment volumes in London reached £732.1 million in the first half of 2021, down 46% compared to the historic five-year average.
New industry data from AHLA: Midway through 2021, a new report and state-by-state job loss breakdown released by the American Hotel & Lodging Association (AHLA) found that while leisure travel is starting to return, the hotel industry’s road to recovery from the pandemic is long and uneven, with urban markets disproportionately impacted. Industry projections have improved since January with the uptick in leisure travel, but the industry remains well below pre-pandemic levels. Key findings include: More than one in five direct hotel operations jobs lost during the pandemic—nearly 500,000 in total—will not have returned by the end of the year; hotel occupancy is projected to drop ten percentage points from 2019 levels; hotel room revenue will be down US$44 billion this year compared to 2019; and states and localities will have lost more than US$20 billion in unrealized tax revenues from hotels over the past two years.
Report on UK hotel business: As the U.K. comes to terms with the after effects of the COVID-19 pandemic and Brexit, stakeholders of the hotel industry are being forced to make major changes to their businesses to return to profitability. In its latest report ‘Future-proofing U.K. Hotels,’ Horwath HTL identifies three key challenges facing the industry — staffing crisis, increases in operating and developmental costs and impact of climate action. These challenges dictate that hoteliers must learn to build and operate more efficiently. Careful planning and close collaboration between owners, operators and lenders will be vital to complete and establish a sustainable platform for growth.
Trump hotel revenue report: While former President Donald Trump’s business took in US$2.4 billion in revenue during his four years in office, according to a report from Forbes, his hotels didn’t fare quite as well. The hotel, licensing and management business estimated revenues stayed around US$100 million from 2017 to 2019, but dropped closer to US$50 million in 2020 in the midst of the pandemic. The biggest portion of Trump’s revenue flowed through his clubs and golf properties, which generated approximately US$940 million over four years.
Canada border reopening plan welcomed: Hours after Canada announced the reopening of its borders to fully vaccinated U.S. travelers from August, the U.S. Travel Association welcomed the decision and urged President Joe Biden to reciprocate by announcing a date and a plan to welcome Canadian visitors to the U.S. “Land travel accounted for more than half of all overnight visits to the U.S. by Canadians pre-pandemic, so taking this step — given the strong rates of vaccination in Canada — will help the U.S. begin safely rebuilding with its No. 1 source market of international visitors. Each month that travel from Canada remains at a standstill comes at a cost to the U.S. economy of US$1.5 billion in potential travel exports,” U.S. Travel Association Executive Vice President of Public Affairs and Policy Tori Emerson Barnes said in a statement.