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Briefs: Polaris acquiring Red Planet; Ascott passes 100 assets with new deal

Polaris Holdings acquires Red Planet: Polaris Holdings Ltd., Tokyo, Japan, has entered into a definitive agreement to acquire all the outstanding shares of the Philippine Acquisition Target Group for JPY857 million (US$6.41 million), which owns and operates 13 limited-service hotels (2,208 rooms) located across the Philippines under the Red Planet brand. Polaris will also acquire two sites for potential hotel development. The deal was facilitated by taking advantage of the long-term relationship of Polaris’ parent company, Star Asia Group, with the seller. Polaris’ board of directors will proceed with the acquisition and consolidate the Philippine Acquisition Target Group as its subsidiary through Polaris Asia. Of the 13 hotels, two are fee simple comprising land and building ownership, while 11 are ground leased with building ownership. With this acquisition, Polaris has increased its rooms under management by 2.54x since the outbreak of COVID-19.

Ascott Residence Trust’s proposed acquisition includes Somerset Capital TD Hai Phong City in Vietnam

Ascott Residence Trust to acquire 9: Ascott Residence Trust (ART), Singapore, has proposed to acquire nine serviced residences, rental housing, and student accommodation properties in five countries from its sponsor The Ascott Ltd. At a projected total capitalized cost of S$318.3 million (US$232.03 million), the yield-accretive acquisition will increase ART’s distribution by S$9.2 million (US$6.7 million) and its pro forma FY 2021 distribution per stapled security by 2.8%. The properties are mostly located in Asia Pacific, with seven of them in Japan, Vietnam, and Australia and two in the United States and France. The acquisition of the nine assets with a total of 1,018 units will expand ART’s properties to S$8.3 billion (US$6.05 billion) on a pro forma basis. Once the acquisition is complete, ART’s portfolio will surpass 100 properties, with more than 18,000 units in 47 cities and 15 countries. In South Carolina, ART is doubling its stake in Standard at Columbia and will acquire an additional 45% stake in the student accommodation property. The transaction is expected to be completed by November.

China domestic tourism: The increase in holiday bookings in China indicates that domestic tourism spending will recover through the remainder of 2022, according to Fitch Ratings. China’s relaxed COVID-19 pandemic-related travel restrictions and more targeted pandemic control measures have fueled a rise in demand. Traveler numbers leaped by more than 62% month-on-month in July, Fitch Ratings said, citing official Chinese data.

Aleph Hospitality enters Congo: Aleph Hospitality, Dubai, UAE, has signed a management contract with Congo-based Sokerico Group to operate Kertel Suites in Kinshasa in Congo. The hotel, which is slated to open in Q1 2023, will mark Aleph’s first property in Congo. With this all-suites addition, Aleph now covers 12 properties in eight countries on the African continent. Aleph has targeted 50 hotels in the Middle East and Africa by 2026.

Lending eases in 2Q: The pace of commercial real estate lending activity eased in the second quarter of 2022 amid heightened market volatility from rising inflation and interest rates, according to the latest research from CBRE. While the CBRE Lending Momentum Index, which tracks the pace of CBRE-originated commercial loan closings in the U.S., declined by 7.9% quarter-over-quarter, it remains up 41.1% year-over-year. CBRE’s lender survey indicates that banks had the largest share of non-agency loan closings in Q2 2022 at 38.1%— up from 27.5% in Q1 2022 and 10 percentage points higher than a year ago. Banks funded a broad mix of permanent, bridge, and construction loans across property types in Q2 2022. Alternative lenders, such as debt funds and mortgage REITs, were the second-most active lending group in Q2 2022 with 32.2% of loan closings—down from 42.7% a year ago, as bridge lending slowed. Rising spreads slowed Collateralized Loan Obligations (CLOs) issuance to $12.3 billion in Q2 2022 from $15.2 billion in the previous quarter. Multifamily has been a preferred property type for CLO issuers, as an office, retail, and hotel bridge lending eased. Life companies accounted for 26.2% of closed non-agency loans in Q2 2022, on par with their Q1 2022 share and more than double their 10.5% share from a year earlier. Most originations were permanent fixed-rate loans to a mix of property types with an average LTV of 57%. CMBS conduit loans accounted for the remaining 3.5% of non-agency loan volume in Q2 2022, down from 16.5% a year ago.

ABA Hospitality rebrands: ABA Hospitality, Tiburon, California, has rebranded as Park Street Hospitality under long-time CEO Scott Brown. The rebranded company will continue to seek lifestyle properties and will add multifamily to its portfolio, as well as new members to its team.

Hawaii sees strong recovery: In an indication of the return of travelers to Hawaii, RevPAR in the state grew 87.6% YOY from US$141.86 in Q2 2021 to US$266.16 in Q2 2022, according to the latest analysis by CBRE. ADR rose 23.5% from US$295.45 in Q2 2021 to US$364.75 and was also trending upward compared to the previous quarter. Occupancy rates averaged 73% across the state as opposed to 48% in Q2 2021, an increase of +2500 BPS. ADRs for the neighboring islands stayed above the statewide average, with Maui leading at US$606.36, followed by the Gig Island of Hawaii at US$404.44 and Kauai at US$395.58. Although occupancy is yet to reach the 80.5% level of Q2 2019, all islands recorded occupancy rates more than the U.S. occupancy rate of 61.6%, ranging from 68.7% for Maui to 77.7% for Kauai. A total of 4,402,151 people visited Hawaii through June 2022 YTD, compared to 2,751,849 visitors in the corresponding period in 2021, an increase of 60%. Total visitor expenditure jumped from US$5,027.4 million to US$9,215.6 million (or 83.3%) from June 2021 YTD to 2022. There was a 4.4% rise in visitor spending compared to the same period in 2019. International tourism saw a positive momentum in the first half of the year, with a 31.2% recovery with visitors arriving from Japan, the highest number since the outbreak of COVID. Twelve additional flights from Japan were added in June and more are likely to be added soon to meet demand.

CBRE arranges refinancing for Sarasota Marriott: CBRE has secured US$57.5 million in refinancing for the 162-room Art Ovation, Marriott Autograph Collection in downtown Sarasota, Florida. Developed by Prime Hospitality Group, the hotel opened in 2018. Eric Fixler and Chandler Kaye of CBRE Capital Markets worked on behalf of the borrower to arrange a 10-year commercial mortgage-backed securities loan with two years of interest-only payments.

Legendary Capital sponsors Residence Inn deal: Legendary Capital, Fargo, North Dakota, has sponsored the acquisition of the 113-key Residence Inn Fort Collins in a US$17.7 million deal. The transaction utilized Legendary Capital’s proprietary Equity Preservation UPREIT (EPU) mechanism, in which Residence Inn ownership contributed the property in exchange for a special class of Transition Partnership Units (T-Units), allowing for the potential preservation of the contributor’s equity as the property restabilizes. The consideration included a payoff of the US$11.5 million loan secured by the Residence Inn and US$5.6 million in T-Units to the Contributor. This is Legendary Capital’s second transaction with the contributor.

Soneva accepts crypto payments: Soneva, Bangkok, Thailand, has announced it will accept Bitcoin and Ethereum cryptocurrencies in all its resorts in Thailand and the Maldives. The payment options can also be used for Soneva Villa Ownership, the scheme which offers real estate to foreign buyers in the Maldives. Soneva has partnered with cryptocurrency payments solutions provider, TripleA, and payment platform provider, Pomelo Pay, to expand its payment options.

Robert James dies: Robert M. (Bob) James, the long-time president of independent hotel management company MHM Inc. and a former member of the U.S. Airforce, was buried at the Arlington Cemetery on August 4. A graduate of Cornell University (1954), James started his career at Hilton Hotels and was the COO of HMC before joining MHM as the founding president. He served as the president of the Dallas and Texas Hotel Associations, chairman of AHLA’s Educational Institute, and hosted many Cornell events at the James Longhorn ranch in Canton, Texas. James retired after serving on the board of Richfield Hotels, the company that acquired MHM in 1986.

Patina Maldives, EHL partner: Patina Maldives, Fari Islands, has partnered with Ecole Hôtelière de Lausanne (EHL) to launch an overseas hospitality education program and the first island resort to have its own multi-functional education system. The Fari Islands archipelago in the Maldives has also welcomed the first batch of students to its Vocational Education & Training center, delivered in partnership with EHL. The three-year courses (May-October) will offer internationally recognized diplomas signed and issued by the EHL and recognized by the Maldives Qualification Authority, offering local talent an alternative to hotel schools across Europe. The course curriculum combines on-the-job training with classroom training and assessments, with two six-month modules. For the inaugural course, 14 students were chosen on a selective basis and are fully sponsored by Patina Maldives. In 2023, more diploma programs will be added to the curriculum.

Business travelers turning to tech: Almost 74% of business travelers are more likely to use digital tools, such as apps and virtual agents, to get disrupted trips back on track since the outbreak of the pandemic, as per latest research by Egencia. About 69% of business travelers surveyed across the U.S., France, and the U.K. said they were likely to experience disruption if they had to travel today (increasing to 76% in the U.K.). Younger professionals are more likely to use tech to manage disrupted schedules than those over 55 years of age, with 75% of under-35 having adopted the tech trend as opposed to 60% of the older generation. The five benefits of using tech to manage disrupted trips are access to real-time updates, time savings, immediate and personalized support from a corporate travel agency, avoiding customer service desks and long queues, and more choices for new arrangements.

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