Hotel & Motel Management - October 15, 2007 - (Page 52)

52 News H&MM October 15, 2007 | HotelMotel.com www.HotelMotel.com/digital_edition Pension fund capital market,” said John McHuntington Hotel & Clelland, principal inSpa in Pasadena, Calif., vestment ofﬁcer for real is up for sale. Continued from page 4 ment funds for our clients.” estate for the association. The property is mansion fund real-estate consultant. “One of the main reasons for “There is every reason to aged by the pension Principal Rob Kochis tracks ands this is that there still is a good balbelieve that this situation fund’s separate account follows the hotel sector. ance of supply and demand in the will last for the immedimanager, Cornerstone “It’s our opinion that the per- market,” he said. “We don’t see ate future.” Real Estate Advisers formance of hotels in general right this changing at all, given that McClelland said he McClelland LLC. The sale of this now is on very solid ground,” he there won’t be any kind of new hosees no impact on ho- LACERA property is part of $700 said. “We are expecting there is go- tel construction boom any time in tels for now with the submillion worth of real-esing to be a 6 percent growth this the near future.” prime market lending situation. tate assets that the pension fund is year in income for the existing hoKochis said a recession could The pension fund holds 100- looking to trade. tels in the market. We don’t see change this. percent ownership in four hotel San Diego City Employees Rethis changing much for the next “Hotels, in general, have close properties with a current value of tirement System is considering in12 months. This is why we are still ties with the economy,” he said. “A $260.2 million. One of the prop- vesting capital into a hotel comlooking at some new hotel invest- recession would mean that comerties, the 392-room Ritz Carlton mingled fund. The one it’s considering is the Cornerstone Hotel Income and Equity Fund II (CHIEF II). enue per available room, $50 for average dai- tioned well in the upper economy market. Dawne Clark is the assistant chief ly rate and a 74 percent occupancy rate before If Budgetel executives think a properinvestment ofﬁcer for the pension owners Marcus Corp. converted to ty owner cannot provide that, “we fund. Continued from page 4 the Baymont brand in 1999. thank them for their interest and “We are going to be considBudgetel is trying to upgrade their project as Although Budgetel leaders are recommend another brand,” ering making an investment into well,” he said. attacking the market heavily in the Evanchyk said. So far, Budgetel this fund in the next few months,” The Suwanee location will be Budgetel’s Southwest, Southeast and Midhas received inquiries from about she said. ﬁrst new-build site and will serve as a proto- west, they are careful with which 400 properties. “Our real-estate consultant, type design that will be used for sites in the property owners they partner with. In May, Budgetel retained Townsend, has to complete their future. Mike Patel said the prototype calls for Evanchyk said they’ve had to walk America’s Best Franchising, headdue diligence ﬁrst and then we will about 68 rooms. away from 25 to 30 deals so far. quartered in Atlanta, to provide make a decision. We had a good “If you don’t have too many rooms, it’s “We’re looking for solid, longservice and support for its hotels. experience with the manager in Evanchyk easier to operate from an operator’s stand- term relationships,” he said. “We BUDGETEL America’s Best will provide BudgeCHIEF I.” point,” he said. want to make sure we get off on tel hotels with a central-reservation Cornerstone reports it is now He added that new builds will have a low- solid footing.” system, as well as other services. in the market trying to raise er investment per key to attract those in the To be sure those partnerships are ideal, Evanchyk said teaming with America’s $400 million to $600 million for economy segment. Evanchyk said Budgetel asks potential fran- Best has “worked out very well” during their CHIEF II. The investment strateThe Patels are reviving a Budgetel brand chisees many difﬁcult questions up front and start-up period. gy for the commingled fund is to that was born in 1973 and at one time fea- provides plenty of information in return. “I can see (the partnership) going longinvest in existing business hotels tured 170 properties in the United States. In Budgetel is looking for properties above 50 term,” he said. around the country. 1999, Budgetel boasted ﬁgures of $37 for rev- units with curb appeal that could be posijfreed@questex.com hmm@questex.com panies would send less people out on business trips and people would look to go on fewer vacations. This would impact the income that existing properties are producing.” The subprime lending market situation has not had any effect on hotels yet, Kochis said. “We have not seen any impact for hotels yet and really don’t see this coming into play for the future either.” Los Angeles County Employees Retirement Assn. believes the hotel investment market is still an attractive one. “We do like the supply/demand characteristics of the hotel Budgetel brand News Briefs Orbitz for Business’ recent corporate traveler survey found 40 percent of those surveyed believe hotels offer the most business amenities to corporate travelers, making it easier to conduct business during their stay. Another 36 percent said online travel agencies have done the best job of providing businessspeciﬁc resources to its customers. Airlines were next at 16 percent, followed by rental car companies (4 percent) and executive car services (4 percent). Compiled by Stephanie Ricca, sricca@questex.com CIRCLE NO. 126 http://HotelMotel.com http://www.HotelMotel.com/digital_edition http://niagraconservation.com http://niagraconservation.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

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