Hotel & Motel Management - February 2009 - (Page 24) H&MM February 2009 | HotelWorldNetwork.com 24 On The Block INVESTMENTS “As a result, risks increase, costs go up and, in the short term, property pricing will suffer.” BOB EATON, PKF CAPITAL BRIEFS Jones Lang LaSalle Hotels’ select-service division sold three Motel 6 properties in Ohio, totaling 299 rooms, to a new Motel 6 franchisee. The buyer purchased the 75-room Motel 6 CincinnatiNorwood, the 103-room Motel 6 ColumbusWorthington and the 121-room Motel 6 ClevelandMacedonia. Hodges Ward Elliott represented Vista Host in the sale of three properties: Hampton Inns in Pittsburgh; Ft. Lauderdale, Fla.; and Jackson, Tenn. HWE represented Vista Host on a fourth property, the Courtyard by Marriott in Jackson, Tenn. in December 2008, and additional properties from the same portfolio are scheduled to close early this year. Hospitium released its 2008 Lodging Ledger, an overview of upscale and luxury transactions in 2008. According to Hospitium, 2008 transaction volume hit its lowest point since 2002. About $4.5 billion in deals occurred in 2008—a marked dropoff from the more than $15 billion in asset trades that took place in each of the previous three years. CB Richard Ellis Hotels released its 2008 Select Major U.S. Hotel Sales Survey, which includes single-asset hotel sales greater than $10 million that are not part of a portfolio transaction. The three largest sales were: Hyatt Regency Waikiki Resort & Spa in Honolulu, $410 million; Hyatt Regency Century Plaza in Los Angeles, $366.5 million; and the Sheraton Grand Hotel in Sacramento, Calif., $130 million. Compiled by Emily Hanna, ehanna@questex.com Investing requires return to fundamentals VP of investments and director of the national hospitality group at Marcus & Millichap. “If you want to be safe, you want to focus on your college towns or areas with medical centers,” he said. “Those are typically Yu recession-proof demand MARCUS & MILLICHAP generators; but near an amusement park or an airport would be much more volatile.” Although luxury hotels may sell at bargain prices in ’09, midscale hotels, like this Holiday Inn Express in Crockett, Texas, might be safer investments. Bargain buying The luxury and economy segments both have been hit hard in terms of RevPAR, which like- Eaton PKF CAPITAL ly will lead to a decline in value, Yu said. “I think that a lot of those purchases we see will probably go back to the lenders, and they’ll probably sell it at a discount from what it would have been traded a few years back,” he said. The decline in value will create bargains for these segments, but mid-market properties are safer investments, he said. Francis agreed forced sales will be prevalent, and potential buyers must be educated and ready for the purchase, moving aggressively on sales they are familiar with. Pricing will be lower for many hotel sales, Eaton said. “Today, with hotel RevPAR declining, along with uncertainty in the mortgage debt market, investment value is more difficult to establish,” he explained. “As a result, risks increase, costs go up and, in the short term, property pricing will suffer.” But capitalizing on lower-priced properties requires a long-term vision that investors must set, Yu said. Buyers probably will hold the property for at least three to five years because property flipping is unlikely to happen any time soon, forcing owners to hold on to their assets, he said. MARCUS & MILLICHAP By Emily Hanna ASSOCIATE EDITOR W competitive position, branding, asset quality and barriers to entry. hen purchasing a hoAdditionally, the foremost tel in today’s econo- indicator of a sound investment is my, making sure it is a location, said Bob Eaton, executive sound investment is more critical managing director of PKF Capital. than ever. And while some good “Being located in a market with investment principles from years a variety of sources of business past might be considered foolish is more advantageous than the in today’s market, other rules re- alternative,” he said. “Multiple main steadfast throughout every sources of demand with different part of the industry cycle. cycles, booking patterns and “Fundamentals seasonal attributes allow never go out of style, operators to yield higher and they gain particular [revenue per available importance during room] than more narrowtimes of economic focused markets.” uncertainty,” said Mike Evaluating the Francis, principal at location’s demand Mumford Co. Francis history is integral because said key markers of a good of fluctuation in certain investment opportunity Francis areas of the country, said are demand sources, MUMFORD CO. Michael Yu, associate Plan in place Eaton said 2009 will be “the year of the plan,” noting that it’s important for buyers to create an outline to placate lenders. “Owners who feel they have equity in their property will need to engage their lenders in developing a strategy for bridging the next 18 months to two years,” he explained. A solid long-term plan involves more than just lenders, however. Yu and Francis said a relationship with a broker is more important now than ever, and Eaton suggests enlisting the services of brokers, attorneys, consultants, operators and franchise representatives to ensure he or she is making the right move. ehanna@questex.com Tampa, Fla. DEAL SPOTLIGHT MUMFORD CO. Mumford Co. represented Supertel Hospitality in the sale of the Hampton Inn of Tampa, Fla., to Bay View One LLC. The sale was facilitated by David Mumford for $7.35 million. The purchaser, a local investment group, plans to make extensive renovations to the hotel and retain the Hampton Inn franchise affiliation. A regional bank in eastern Florida provided financing for the deal. This is the 27th hotel Mumford Co. has sold on behalf of Supertel Hospitality and its affiliates over the past 10 years. ONLINE EXTRA: To keep up to date on or notify people of your recent transactions, visit www.hotelworldnetwork.com/forums. http://www.HotelWorldNetwork.com http://www.hotelworldnetwork.com/forums
Table of Contents Feed for the Digital Edition of Hotel & Motel Management - February 2009 Hotel & Motel Management - February 2009 Contents Staff Management is Key for Smaller Budgets Perspective Guests Expect More from Green Programs Sales Clinic Legally Speaking HotelWorld Update Consultant's Corner Trends & Stats Laundry Investing Requires Return to Fundamentals Limited-Service Hotel-Chains Energy Management Ice Machines Broadband Marketplace Ad/Editorial Index Checking Out Hotel & Motel Management - February 2009 Hotel & Motel Management - February 2009 - Hotel & Motel Management - February 2009 (Page 1) Hotel & Motel Management - February 2009 - Hotel & Motel Management - February 2009 (Page 2) Hotel & Motel Management - February 2009 - Contents (Page 3) Hotel & Motel Management - February 2009 - Staff Management is Key for Smaller Budgets (Page 4) Hotel & Motel Management - February 2009 - Staff Management is Key for Smaller Budgets (Page 5) Hotel & Motel Management - February 2009 - Perspective (Page 6) Hotel & Motel Management - February 2009 - Perspective (Page 7) Hotel & Motel Management - February 2009 - Guests Expect More from Green Programs (Page 8) Hotel & Motel Management - February 2009 - Guests Expect More from Green Programs (Page 9) Hotel & Motel Management - February 2009 - Sales Clinic (Page 10) Hotel & Motel Management - February 2009 - Sales Clinic (Page 11) Hotel & Motel Management - February 2009 - Legally Speaking (Page 12) Hotel & Motel Management - February 2009 - Legally Speaking (Page 13) Hotel & Motel Management - February 2009 - HotelWorld Update (Page 14) Hotel & Motel Management - February 2009 - HotelWorld Update (Page 15) Hotel & Motel Management - February 2009 - Consultant's Corner (Page 16) Hotel & Motel Management - February 2009 - Consultant's Corner (Page 17) Hotel & Motel Management - February 2009 - Trends & Stats (Page 18) Hotel & Motel Management - February 2009 - Trends & Stats (Page 19) Hotel & Motel Management - February 2009 - Laundry (Page 20) Hotel & Motel Management - February 2009 - Laundry (Page 21) Hotel & Motel Management - February 2009 - Laundry (Page 22) Hotel & Motel Management - February 2009 - Laundry (Page 23) Hotel & Motel Management - February 2009 - Investing Requires Return to Fundamentals (Page 24) Hotel & Motel Management - February 2009 - Investing Requires Return to Fundamentals (Page 25) Hotel & Motel Management - February 2009 - Limited-Service Hotel-Chains (Page 26) Hotel & Motel Management - February 2009 - Limited-Service Hotel-Chains (Page 27) Hotel & Motel Management - February 2009 - Limited-Service Hotel-Chains (Page 28) Hotel & Motel Management - February 2009 - Limited-Service Hotel-Chains (Page 29) Hotel & Motel Management - February 2009 - Energy Management (Page 30) Hotel & Motel Management - February 2009 - Energy Management (Page 31) Hotel & Motel Management - February 2009 - Ice Machines (Page 32) Hotel & Motel Management - February 2009 - Ice Machines (Page 33) Hotel & Motel Management - February 2009 - Broadband (Page 34) Hotel & Motel Management - February 2009 - Broadband (Page 35) Hotel & Motel Management - February 2009 - Broadband (Page 36) Hotel & Motel Management - February 2009 - Broadband (Page 37) Hotel & Motel Management - February 2009 - Marketplace (Page 38) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 39) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 40) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 41) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 42) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 43) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 44) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 45) Hotel & Motel Management - February 2009 - Checking Out (Page 46) Hotel & Motel Management - February 2009 - Checking Out (Page 47) Hotel & Motel Management - February 2009 - Checking Out (Page 48)
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