Hotel & Motel Management - November 19, 2007 - (Page 36)

36 News H&MM November 19, 2007 | HotelMotel.com LIIC’s mission The Lodging Industry Investment Council (www.liic.ws) is the premier think tank in the hotel industry. Its members include a diverse mix of 70 inﬂuential leaders in the real-estate and ﬁnance ﬁelds. Membership is by invitation. Co-chairmen: Mike Cahill, president and founder, HREC—Hospitality Real Estate Counselors; Sean Hennessey, c.e.o., Lodging Investment Advisors Vice chairman: Jim Butler, partner, Jeffer Mangels Butler & Marmaro Mike Cahill Jim Butler Sean Hennessey LIIC panel Continued from page 1 The majority of attendees said valuations have declined, thanks to the credit crunch. “We’re in a repricing exercise right now,” said Bernie Siegel, principal with KSL Capital Partners. “There’s still a lot of denial, but this correction was necessary for long-term health.” Doug Dreher, president of The Hotel Group, said his company would like to sell two to four of its assets during the next year, but because he isn’t being forced to sell, he’ll most likely wait until values settle. He said he is looking to acquire properties that might have been victims of the crunch. “We don’t have a gun to our head, but we’d like to return the equity on the fund side, and that’s bad news, because clearly, it’s irrefutable there is some valuation in mind,” he said. “We’re in a decent spot as a seller because the properties have good cash ﬂow and are fully renovated. On the buying side, we see opportunity. Brokers in the group said they have seen the decline. “I don’t know if it’s 5, 10 or 20 percent,” said Michael Blahosky, ﬁrst v.p.-director of CB Richard Ellis. “I don’t think anybody’s ﬁgured that out yet. I do think there’s going to be some seller reluctance to try to market these properties.” Rich Conti, president of The Plasencia Group, said: “There’s a transition period going on. Prices are going to readjust. They have not yet readjusted in the minds of the seller. The transition takes three to six months for the sellers to get more comfortable with it.” Clyde Guinn, senior v.p.-operations with Stanford Hotels, said the San Francisco company is on the lookout for good hotels. “We haven’t found anything pricing-wise that lends itself to a long-term hold,” he said. Bill Reynolds, managing director and chief investment ofﬁcer for Thayer Lodging Group, said it’s not time to panic because of a blip on the radar. “Our basic strategy is still value add,” Reynolds said. “Every issue right now revolves around when’s a good time to buy. If the ice starts cracking, it will be a better time to potentially buy.” Patrick Deming, managing director of Eastdil Secured, reminded the group that the crunch affected all real-estate classes. “I disagree that values are down that much,” he said. “This is not a hotel sector problem. It’s a global credit trend. We’re just going to have to get through this. Many attendees said they believe industry fundamentals will remain strong throughout 2008: Dan Lesser, senior managing director-industry leader for the Hospitality & Gaming Group at CB Richard Ellis, said, “We can look back the past 25 years and we’ve had numerous corrections. Frankly, the U.S. economy—if you watch what’s going on in China and India—it’s all being driven by U.S. goods and services. While there may not be a tremendous amount of growth in the states, there is tremendous growth in the market. Bill Sipple, corporate v.p., development, full-service hotels for Carlson Hotels & Resorts Worldwide, said, “While there’s some leveling off of the industry metrics, we’re starting to see growth in other markets. Our company is active internationally, and while the performance here in the states may be leveling, there are international markets taking off.” jhigley@questex.com CIRCLE NO. 109 CIRCLE NO. 101 http://www.liic.ws http://HotelMotel.com http://www.liic.ws http://www.vistarez.com http://www.vistarez.com http://www.cybexhospitality.com http://www.cybexintl.com

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Hotel & Motel Management - November 19, 2007 Contents Torrid Hotel Sales Pace Persists Boykin Takes Steps to Regain Foothold Best Western Sets 10-year Plan Perspective At Your Risk HotelWorld Update Sales Clinic Events Trends & Stats Charting H&MM's Top Lodging Design Firms Fitness Equipment Supplier News PMS Software Provides One-Click Solutions High-Quality Linens Require Higher-Quality Cleaning Despite Slow Market, Condo Hotels Thrive Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - November 19, 2007

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