Hotel & Motel Management - October 15, 2007 - (Page 4)

4 News H&MM October 15, 2007 | HotelMotel.com www.HotelMotel.com/digital_edition Concord sets goal to double portfolio By Stephanie Ricca MANAGING EDITOR CONCORD HOSPITALITY ENTERPRISES Per-room hotel values increased, on average, by 22 percent across the U.S. in 2006, according to the 2007 U.S. Hotel Valuation Index from HVS Hospitality Services. On average, per-room values grew about $18,000 in 2006. Perroom values increased 26 percent in 2005. Sixty-two of the 66 markets in the HVS survey experienced increases in per-room values in 2006, attributed to growing business and leisure travel. Hotel Brokers International expects the hotel industry to post record hotel real-estate sales in 2007. The company predicted sales to increase 8 percent in 2007, up from $25 billion in 2006. Inland American Real Estate Trust plans to pay $920 million for RLJ Urban Fund, an afﬁliate of RLJ Development LLC. Twenty-two hotels are part of RLJ Urban Fund. The companies expect the deal to close by year’s end. Equity Inns’ shareholders approved the company’s plan to merge into Grace Acquisition I, an afﬁliate of Whitehall Street Global Real Estate Limited Partnership 2007. The company expects the merger to close on or around Oct. 22. The deal was valued at $2.2 billion, including debt, when it was announced in June. The Courtyard Pittsburgh Shadyside was part of the 19-hotel portfolio Concord Hospitality Enterprises sold to Moody National Cos. Concord will continue to manage this 132-guestroom property. Raleigh-Durham, N.C.–With its recent 19-hotel, $440-million portfolio sale—the largest in company history—Concord Hospitality Enterprises is poised to achieve lofty growth goals over the next few years. Mark Laport, Concord president, said his plan is to build $500 million in new hotels and double the company’s portfolio to 100 owned and managed hotels by 2010. With the sale, Concord now owns or manages 51 properties, Laport CONCORD HOSPITALITY comprising 6,318 guestrooms, in 10 states and Canada. The purchaser, Moody National Cos., will acquire a 20th hotel in a separate transaction. The 19See Portfolio | page 54 Leaders: Budgetel brand off and running By Jason Q. Freed ASSOCIATE EDITOR Bossier City, La.–If the last quarter of 2007 goes as expected, 15 properties in the South and Midwest United States will be gearing up to hang Budgetel’s colorful new logo above their front doors. After brothers Mike and R.C. Patel announced they acquired Budgetel franchise operations and trademarks from The Blackstone Group in March, the two have been moving to ﬁle paperwork, develop license agreements and secure solid relationships with franchisees. Mike Patel said interest in the brand has been greater than expected. “[Budgetel] was a proven brand at one time,” he said. “People are coming back be- cause it left a good taste in their mouth.” Randy Evanchyk, executive v.p. of franchise development for the Budgetel Franchise System, said the company’s goal is to have 15 executed deals by the end of 2007. “It looks good so far,” he said. “We’ve got one deal signed and 10 Patel in the pipeline.” BUDGETEL The ﬁrst Budgetel property, a renovated Shoney’s Inn in Bossier City, La., is scheduled to open this month, and a property is under construction in Suwanee, Ga. New-build properties in Houston and Dallas also are in planning stages. Evanchyk said Budgetel is planning on around 80 percent of its properties being con- versions and 20 percent being new builds. He said he had originally expected about 10 percent new builds. Andy DeSai, owner of the Bossier City property, said he expects a good partnership with Budgetel as a franchisor because of the company’s close involvement in the deal on a personal level. “All the franchise people, everyone is willing to work with us,” DeSai said. “Everyone calls me to introduce themselves.” DeSai said his 114-room brick property is in a solid market and is surrounded by restaurants and other franchise hotels. He said he “would love to see 100 percent success,” but expects 70 to 80 percent occupancy. “I’m trying to upgrade my project and See Budgetel brand | page 52 Pension funds put more capital into hotels By Jon Peterson CONTRIBUTING EDITOR LodgeWorks launched Avia, a new boutique hotel collection. The ﬁrst locations, in Savannah, Ga.; Long Beach, Calif.; and Napa, Calif.; broke ground in September and will open in 2008 and 2009. For updated breaking news, visit www.HotelMotel.com. National Report–Pension funds continue to show interest in hotels, investing capital while the market is hot. Most investors in hotels said they are conﬁdent the upswing hotels have enjoyed over the past few years should continue for at least another year. The only possible event that could alter the situation would be an economic recession. Most pension funds or their consultants and real-estate man- agers don’t see any impact managed by RLJ Develon hotels yet from the subopment. Its newest comprime lending crisis. mingled fund will have California Public Ema total equity raise of $1 ployees Retirement Sysbillion. The real-estate tem has an active homanager will be making tel investment program. a $15-million co-investThis is done through inment into the comminvesting in commingled or Kochis gled fund. The stratepooled funds. The most THE TOWNSEND GROUP gy for the commingled recent addition to its profund is to invest in Margram was making a $200-million riott and Hilton branded hotels in commitment to the RLJ Real- urban and dense suburban marEstate Fund III. kets around the country. This is a commingled fund CalPERS could soon take its hotel program to another level with an international strategy. The group reported it is looking at creating an international hotel investment platform. It will not be making any kind of decision on this strategy until next year. At this time, there has been no decision made as to what countries it would be investing in or the amount of capital earmarked for the strategy. Cleveland-based The Townsend Group is a leading penSee Pension fund | page 52 http://HotelMotel.com http://www.HotelMotel.com/digital_edition http://HotelMotel.com

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - October 15, 2007

Hotel & Motel Management - October 15, 2007 Contents Concord Sets Goal to Double Portfolio Leaders: Budgetel Brand Off and Running Pension Funds Put More Capital Into Hotels Perspective Letter to the Editor At Your Risk Consultant's Corner Sales Clinic On Finance Guest Column Trends & Stats Industry Leaders Say Healthy Times Will Continue Eco-Concious Hotels Looks for Certification Events Removing Chemicals, Suds from Housekeeping Products Handhelds Help Track Safe Activity People on The Move Awards Transactions Supplier News Ad/Editorial Index Bath Trends Marketplace Classifieds Checking Out

Hotel & Motel Management - October 15, 2007

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.