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Hotel investments: No more fire sales
Hote Investments: No More Fire Sales Hotel prices continue to rise as inore investors are attracted to the market. Nevertheless, would-be hotel purchasers see opportunity, according to a survey by Landauer Associates. part of the reason for investor mterest is that purchase prices for full-service hotels remain below replacement cost despite continual price increases. Kenneth Wilson, national director of Landauer’s hospitality group, sees a “wide spectrum of opportunity” for acquisitions and new construction. Wilson says, “The key is finding the deals that are driven by market support, rather than financing availability” Some investors might miss the “good old days” of 1993 when a hotel offering might draw no more than three bids, Wilson wrote in Landaueis Hotel Investnlerft O&J&. Today, the field is more crowded, with as many as ten buyers circling a good deal. A Landauer survey during summer 1995 found increasing availability of debt capital. Landauer’s respondents expect new construction of full-service hotels to resume in earnest in 1997 or 1998. Bedrock. Among the many investor groups seeking undervalued hotels is Bedrock Partners, which owned 16 hotels as ofAugust 1995 and plans to acquire a total of two dozen by the end of 1995. Based in Dallas, Bedrock controls a $350-million capital pool to be used in acquiring properties of 140 to 250 rooms in metropolitan markets. The partnership seeks hotels that need repositioning, operational improvement, and, sometimes, capital improvement. Bedrock’s strategy is to convert the hotels to upper-moderate prices.
Some examples of recent Bedrock deals include the 140-room Wyndham Pittsburgh Airport, which received a $3.5-million upgrade; the 179-room Rte. 128 Days Inn in suburban Boston, set for a $5.5-million renovation; a 240-room Ramada Inn near the University of Denver, which gets a $6.5 infusion; and the 365room Harvey Hotel Atlanta Airport, which will be refurbished for $2 million.-G. I#
In-SuiteWorkouts Five Hilton Suites properties have latched onto an important trend in guest preferences. Many people want to work out in their rooms, rather than prancing through the halls to a health club in their workout togs. Hotels have begun to notice. New York’s Four Seasons hotel offers a 30-minute in-room workout tape through Spectradyne ($7.95 per view) that uses the furniture as “equipment.“The forthcoming Westin 2000 concept room, as depicted in the August 1995 Come11 Quavferly (p. 15) will feature a Nordic Trak trainer. Five Hilton Suites have that feature today, howeverLifecycle aerobic trainers in the suites. Guests can also borrow fitness-related items, such as stopwatches, videos, and hand weights. As with all Hilton Suites, the properties also have full-service health clubs. u The five partic :ivating I properties are in Orange, California; Brentwood, Tennessee; Oakbrook Terrace, Illinois; Phoenix, Arizona; and Au’ burn Hills, ; Michigan.G.W
eraton rolled out a new midscale, fi-anchise-only flag in new chain, Four Ipwill comnrise
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our Pointa was created to potential market confusion created by the Sheraton Inn name. Sheraton’s description of the new chain makes it appear to be a direct competitor with Courtyard by Marriott and other “garden” Q-PC hotels.-G. T4!
The ICKgeSt conference hotel in the American ~jouthwest is now under the management of Wyndham Hotels R: Resorts. Dallas’s Anatoie, long operated by Loews Hot&, has become Wyndham’s flagship property. The Anatole, with 1.620 rooms, comprises 58 meeting rooms, four ballrooms, and more than 240,000 square feet of meeting and exhibit sp;:,ce. In the threequarter-mile dzstance between its two frant desks, the property offers six restaurants, four lounges, a nightclub. and ten specialty stores. Based in Dallas, Wyndham has embarked on d strategy of gaining a presence in top U.S. markets. It now manages the Be1 Age Hotel in West Hollywood, Boston’s Copley Plaza, and San Diego’s Emerald Plaza. It will soon open a hotel in Cleveland to add to its lineup of60 upscale properties. Wyndham is an offshoot of the Trammel1 Crow 1Companies, which is a part owner of the Anatole.-G. I#
Ckiober1995 8 1
Some examples of recent Bedrock deals include the 140-room Wyndham Pittsburgh Airport, which received a $3.5-million upgrade; the 179-room Rte. 128 Days Inn in suburban Boston, set for a $5.5-million renovation; a 240-room Ramada Inn near the University of Denver, which gets a $6.5 infusion; and the 365room Harvey Hotel Atlanta Airport, which will be refurbished for $2 million.-G. I#
In-SuiteWorkouts Five Hilton Suites properties have latched onto an important trend in guest preferences. Many people want to work out in their rooms, rather than prancing through the halls to a health club in their workout togs. Hotels have begun to notice. New York’s Four Seasons hotel offers a 30-minute in-room workout tape through Spectradyne ($7.95 per view) that uses the furniture as “equipment.“The forthcoming Westin 2000 concept room, as depicted in the August 1995 Come11 Quavferly (p. 15) will feature a Nordic Trak trainer. Five Hilton Suites have that feature today, howeverLifecycle aerobic trainers in the suites. Guests can also borrow fitness-related items, such as stopwatches, videos, and hand weights. As with all Hilton Suites, the properties also have full-service health clubs. u The five partic :ivating I properties are in Orange, California; Brentwood, Tennessee; Oakbrook Terrace, Illinois; Phoenix, Arizona; and Au’ burn Hills, ; Michigan.G.W
eraton rolled out a new midscale, fi-anchise-only flag in new chain, Four Ipwill comnrise
full-
our Pointa was created to potential market confusion created by the Sheraton Inn name. Sheraton’s description of the new chain makes it appear to be a direct competitor with Courtyard by Marriott and other “garden” Q-PC hotels.-G. T4!
The ICKgeSt conference hotel in the American ~jouthwest is now under the management of Wyndham Hotels R: Resorts. Dallas’s Anatoie, long operated by Loews Hot&, has become Wyndham’s flagship property. The Anatole, with 1.620 rooms, comprises 58 meeting rooms, four ballrooms, and more than 240,000 square feet of meeting and exhibit sp;:,ce. In the threequarter-mile dzstance between its two frant desks, the property offers six restaurants, four lounges, a nightclub. and ten specialty stores. Based in Dallas, Wyndham has embarked on d strategy of gaining a presence in top U.S. markets. It now manages the Be1 Age Hotel in West Hollywood, Boston’s Copley Plaza, and San Diego’s Emerald Plaza. It will soon open a hotel in Cleveland to add to its lineup of60 upscale properties. Wyndham is an offshoot of the Trammel1 Crow 1Companies, which is a part owner of the Anatole.-G. I#
Ckiober1995 8 1