New York selling spree: New York City hotel developer Sam Chang and his McSam Hotel Group has reported sold the Times Square Hyatt to a limited liability company for about US$166 million and shortly thereafter this week sold its Marriott Fairfield Inn & Suites in the Financial District to Concord Hospitality of North Carolina for US$69 million. It was also reported that Concord has sold its Cambria Suites hotel in Times Square for US$88.6 million.
NYC mayor signs severance pay bill:Â New York City Mayor Bill De Blasio signed a severance pay bill during an in-person rally at the City Hall on Tuesday mandating hotels to pay severance to employees if they have been laid off during the COVID-19 pandemic. The bill requires hotels with more than 100 rooms to pay severance worth US$500 per week for upwards of six months if they have fired more than 75% of their workers during the pandemic and are currently operating at those staffing levels. This will act as an incentive for hotels to rehire staff they had fired at a time when the hospitality industry is keen on capitalizing on the revival of tourism. The rally was also attended by members of the Hotel Trades Council and its president Rich Maroko.
Driftwood acquires in Atlanta: Driftwood Capital, Coral Gables, Florida, has acquired for an undisclosed price The Wylie Hotel, a new 111-room boutique hotel in Atlanta, Georgia, from Kim King Associates and WHI Real Estate Partners. Driftwood will continue as the hotel’s operator. This acquisition expands Driftwood’s portfolio to 24 full-service hotels and seven new ground-up hotel developments. The hotel, which opened in May, was created following the expansion and refurbishment of 551 Ponce, a 1920s era hotel.
The Student Hotel secures funding: The Student Hotel in Amsterdam has received €300 million (US$347.9 million) in funding from its shareholders AMPG and Aermont. APG provided €175 million (US$202.9 million) of investment through the LRF venture, which is managed by LaSalle. The funding will be utilized in constructing seven new flagship hotels in key EU gateway cities and add almost 3,000 rooms to their portfolio, as well as pursue additional investments. Despite the pandemic, The Student Hotel managed to open three hotels in Bologna, Italy, Delft, Netherlands, and Vienna, Austria, in the last 18 months. The company’s anticipated revenue in 2022 stands at €100 million (US$116 million), a 25% rise over the pre-pandemic levels. The company is set to open three new hotels in the next year in Europe.
JLL closes sale of Chicago’s Talbott: A partnership between Geolo Capital, San Francisco, California; Wanxiang America Real Estate Group, Chicago; and Sterling Bay, Chicago, has sold the 178-room Talbott Hotel in Chicago unencumbered of management and brand to an unnamed Canadian-based hospitality real estate investor for an undisclosed price. JLL Hotels & Hospitality represented the sellers.
Springboard acquires Neptune Resort: Springboard Hospitality has acquired for an undisclosed price the 71-suite Neptune Resort in Fort Myers Beach, Florida, from a private investor through a partnership between Continental Hospitality Group and Springboard Investment Advisors, the newly created advisory and investing affiliate of Springboard Hospitality. Springboard operates more than 38 branded and independent properties across 10 states. The acquisition marks Springboard Investment Advisors’ first year of operation.
Hyatt, Chase launch business credit card: Hyatt Hotels Corp. and Chase Card Services have launched a business credit card that automatically rewards card members double the points every quarter on the purchases made in categories in which they spend the most. The card, whose annual fee is US$199, awards points nine times the total on Hyatt stays and experiences. The “adaptive rewards accelerator” rewards members with two bonus points on every US$1 spent for the top three out of the eight spend categories each calendar quarter till December 31, 2022, and the top two of eight categories following that.
Millennials to spend the most on travel: As travel restrictions ease and travel sentiment increases, millennials have emerged as the category that is likely to spend the most this holiday season with an average budget of US$1,646 (compared to US$1,447 for all consumers), according to PwC’s Holiday Outlook 2021 report. The survey revealed that while most travelers plan to stay with family or friends at branded hotels, millennials opt for branded hotels while Gen Z prefer short-term rentals. After several months of uncertainty and anxiety, pent-up travel demand will result in consumers spending an average of US$1,447 on travel, gifts and entertainment, a 20% increase from last year. Travel spending is also set to rise as compared to the 2019 season.
Record year for REIT M&A: Driven by strategic and private capital, 2021 has been a record year for REIT M&A as it hit US$108 billion in transaction volume till September 30, according to the M&A and Strategic Transactions Monitor report by JLL’s Capital Markets M&A and Corporate Advisory. All the major REIT sectors are generating profit with formerly out-of-favor sectors like retail and hospitality growing 56% and 15% respectively. This has resulted in a boom in REIT M&A and larger commercial real estate deals volume, which is set to reach the 2019 level of US$80 billion. A median REIT currently owns about US$4.5 billion of real estate, which is four times higher than the size of a median REIT since the last two decades.