Author of www.HotelLawBlog.com
9 May 2008
Hotel Attorney at Meet the Money® — Report on Major Hotel Transactions by Suzanne R. Mellen, MAI, CRE, Managing Director of HVS, San Franciso. We always get the latest updates on the State of the Hotel Industry at Meet the Money® — JMBM’s annual hotel conference which just concluded its 18th annual edition. And one of my favorite updates is the one that Suzanne Mellen of HVS gives us on major hotel transactions.
Here is the very latest . . .
Major Hotel Transactions.
For many years, our friends at HVS have been collecting data on what they call “Major Hotel Transactions.” These are single property transactions — not portfolios — where the transaction price exceeds $10 million.
This first slide shows the number of major hotel transactions per year from 1990 through the present.
Note the dramatic fall off in volume of these transactions in 2008 — only 20 transactions — for January through April of 2008, compared to 106 for the same period in 2007.
And this next slide shows the average price per room by year. Look at the change represented by the data for January through April of 2008 compared to January through April of 2007.
IMPORTANT CAVEAT: Suzanne Mellen noted that the recent sharp decrease in average price per room did NOT mean that price per room is necessarily coming down. She believes that this fact, at least presently, is largely attributable to the fact that higher priced properties are not involved in buy-sell transactions (see 2 slides below). So this slide is really showing us the average price per room of more midscale or economy-oriented properties that have transacted in 2008, and this skews the results.
. . . and more detail of the transactions by month . . .
. . . and by transaction sale price. Look at the complete absence of any hotel transactions at a price of $100 million or more in 2008 — a new milestone for the decade!
Here is the same data presented in a different graphic format.
Presentations from Hotel Industry Leaders will be available on www.HotelLawBlog.com
Other Hotel Industry Leader information from Meet the Money on the State of the Hotel Industry can be found in related postings here at www.HotelLawBlog.com. The best way to see them all is to go to the Blog and sort by topics (down the right hand side of the screen), and then click on the topic, “Meet the Money.” Or you can just click here.
• Bobby Bowers of Smith Travel Research
This is Jim Butler, author of www.HotelLawBlog.com and hotel lawyer, signing off. We’ve done more than $87 billion of hotel transactions and more than 100 hotel mixed-used deals in the last 5 years alone. Who’s your hotel lawyer?
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Our Perspective. We represent developers, owners and lenders. We have helped our clients as business and legal advisors on more than $125 billion of hotel transactions, involving more than 4,700 properties all over the world. For more information, please contact Jim Butler at jbutler@jmbm.com or 310.201.3526.
Jim Butler is one of the top hotel lawyers in the world. GOOGLE “hotel lawyer” or “hotel mixed-use” or “condo hotel lawyer” and you will see why.
Jim devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of 50 seasoned professionals with more than $87 billion of hotel transactional experience, involving more than 3,900 properties located around the globe. In the last 5 years alone, Jim and his team have assisted clients with more than 100 hotel mixed-use projects, all of which have involved at least some residential, and many have also involved significant spa, restaurant, retail, office, sports, and entertainment components — frequently integrated with energizing lifestyle elements.
Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. They are a major gateway of hotel finance, facilitating the flow of capital with their legal skill, hospitality industry knowledge and ability to find the right “fit” for all parts of the capital stack. Because they are part of the very fabric of the hotel industry, they are able to help clients identify key business goals, assemble the right team, strategize the approach to optimize value and then get the deal done.
Jim is frequently quoted as an expert on hotel issues by national and industry publications such as The New York Times, The Wall Street Journal, Los Angeles Times, Forbes, BusinessWeek, and Hotel Business. A frequent author and speaker, Jim’s books, articles and many expert panel presentations cover topics reflecting his practice, including hotel and hotel-mixed-use investment and development, negotiating, re-negotiating or terminating hotel management agreements, acquisition and sale of hospitality properties, hotel finance, complex joint venture and entity structure matters, workouts, as well as many operating and strategic issues.
Jim Butler is a Founding Partner of Jeffer, Mangels, Butler & Marmaro LLP and he is Chairman of the firm’s Global Hospitality Group®. If you would like to discuss any hospitality or condo hotel matters, Jim would like to hear from you. Contact him at jbutler@jmbm.com or 310.201.3526. For his views on current industry issues, visit www.HotelLawBlog.com.