6 February 2014
Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce the successful closing of a number of hotel and real estate purchases by members of its Chinese Investment Group®. The attorneys in JMBM’s Chinese Investment Group® help Chinese investors make investments in the United States – particularly those involving hotels and real estate. They also provide guidance on corporate structure, formation, tax issues, governance and regulatory compliance.
26 December 2013
The hotel lawyers of JMBM’s Global Hospitality Group® and Chinese Investment Group® assisted Hazens Investment, LLC, in the company’s purchase of the 15-story, 802-room Sheraton Gateway LAX Hotel, located close to Los Angeles International Airport.
Hazens Investment is a subsidiary of Shenzhen Hazens Real Estate Group Co. Ltd., one of the top 100 largest construction and development companies in China, based in Shenzhen, China. Hazens Investment and the seller, an affiliate of Long Wharf Real Estate Partners, closed the deal on November 19, 2013.
“With a great deal of experience in representing Chinese investors over the years, we have formed a special practice group to assist China-based clients in successfully closing transactions in the U.S.,” said Jim Butler, Chairman of JMBM’s Chinese Investment Group® and Global Hospitality Group®. The acquisition of the Sheraton Gateway marks Shenzhen’s first U.S. based acquisition.
Greg Sun, Vice President of Hazens Investment, stated: “When we engaged U.S. counsel for the transaction, we not only sought out a law firm expert in the hospitality industry, which JMBM is known for, but also specifically a Mandarin speaking attorney like Chang, who could not only communicate in Mandarin directly with Shenzhen’s key personnel during the negotiations, but also understands the cultural differences of doing business in China and the U.S. and is able to bridge that gap.”
JMBM’s Chinese Investment Group® is a dedicated team of hotel, real estate and corporate lawyers that advise Chinese investors in making prudent and economically successful investments in hotels and real estate in the U.S.
13 December 2013
Hotel Lawyer with some insights on buying and developing golf courses.
Hotel investors suddenly seem to be buying or building more golf courses. With the right expectations and circumstances, golf courses can make sense — particularly as an amenity for hotels, residential development and other real estate. But as more hospitality clients look at golf courses, it seems appropriate to consider the drivers of this renewed interest, and some of the similarities golf courses share with other hospitality investments such as hotels. And finally, we want to look at some of the big factors that make golf courses very different from other hospitality investments, so you can avoid some unnecessary pitfalls.
Why the increased interest in golf courses?
Interest in golf courses has likely increased for a number of reasons, including the continuing overall improvement in the economy, favorable projections for the hotel industry, the return of home builders to the active market, and the likely surge in new development in 2014 and beyond. In addition, it is now well proven that “mixed-use” really works, and that includes adding a golf amenity for hotels, condos, residential and other real estate product. On top of all this, there is a wave of Asian investment and tourism — particularly Chinese — that favors golf.
Many of these investors and developers are familiar with hotels, and have established teams of experts that are familiar with hotels — but they often don’t have golf course-specific experience and capabilities.
That is why it is important to realize that hotels are different (from golf courses) though they share a number of characteristics and are often both regarded as “hospitality” product. Recognizing the similarities and the important differences will enable investors and developers to fill in potential gaps of expertise to avoid unnecessary problems.
18 September 2013
A version of this article was first published in the September 21, 2013 issue of Hotel Business and is reprinted with permission.
The number of hotel transactions is up by more than 50% for the first 6 months of 2013 over the comparable period last year, and is expected to top $18 billion for 2013, according to Jones Lang LaSalle. And HVS reports that the sales transaction volume of hotels is now intersecting its 22-year moving average, and predicts that hotel values will continue to grow at an average of 12% for each of the next 3 years (substantially less than the past couple of years, but still a nice increase in value).
These numbers are only the tip of the economic iceberg that hotel owners and investors analyze in depth, to help make decisions as to the right time to buy and sell hotels. As they delve deeper, they are finding a confluence of economic and market conditions that spell “opportunity.”
But how can it be a great time to buy and sell hotels? Why does the same environment indicate such different courses of investment strategy?
We will look at some of the factors that create this fertile ground, while keeping in mind that every owner and investor has a specific circumstance, investment horizon, capital situation and objective, and every hotel property has a specific condition, value, and potential for additional appreciation.
8 March 2013
JMBM’s Global Hospitality Group® announces publication of the How to Buy a Hotel Handbook.
The Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP (JMBM) today announced the release of the How to Buy a Hotel Handbook, third in the “We Wrote the Book™” series of handbooks published by the Group’s hotel lawyers.
Jim Butler is the Chairman of JMBM’s Global Hospitality Group®. The How to Buy a Hotel Handbook is based on the experience Jim’s team has gained from more than $87 billion of hotel transactions involving more than 1,300 hotels all over the world. The Handbook provides a detailed overview of the hotel acquisition process, a thorough due diligence checklist, and informative articles that address some of the most important questions that arise when buying or selling a hotel.
21 February 2013
Hotel Lawyers with Lodging Industry assessment: Demand is strong, supply is weak. RevPAR is healthy. What’s not to like?
We continue to receive calls from hotel owners, developers, investors, lenders, and members of the media asking, “What is the hospitality investment outlook for 2013 and beyond?”
There is a growing optimism among industry veterans and many of them are revitalizing acquisition (and a few development) projects. The level of activity has kicked up a notch or two.
One thing that everyone likes: barring unforeseen events, the stage is set for continuing improvement in hotel industry fundamentals and hotel valuations for at least 5 years – through 2017.
This presents a very attractive backdrop for investors, and experienced investors are already putting their plans in motion.
1. Fundamentals: What the numbers say
20 February 2014
Hotel Lawyer with some great information for our friends who want to know more about how to buy a hotel.
Bruce Baltin and I are very excited to announce the release of a publication that has been in the works for many years (see below). As most of you know, Bruce Baltin is Senior Vice President of PKF Consulting. He has been a long-time friend, and great resource for help on anything involving the hotel industry.
The name of our just-released publication is:
How to Buy a Hotel:A Detailed Overview of the Hotel Acquisition Process
As the title suggests, this publication is an “overview.” However, at almost 30 pages, it is quite a detailed overview of the entire hotel acquisition process.
17 February 2013
Hotel Lawyer on buying hotels
Our hotel lawyers spend a big part of their time helping clients identify and vet attractive hotel acquisition targets, and then get them under contract, run a thorough (but fast) due diligence, arrange financing and execute on the purchase. Often there is a lot of follow up work in repositioning the property or cleaning up some old problems.
But one of the perennial questions we hear from people is, “Is this a good time to buy a hotel?”
A little more than 2 years ago, my partner Guy Maisnik wrote an article on this very subject. It was called “So you think you want to buy a hotel?” That article has been one of our best-read pieces on Hotel Law Blog, and similar questions keep bouncing around. So we persuaded Guy to write an update, which continuing improvements in the hotel industry forced him to rename: “NOW is a great time to buy a hotel (and not a bad time to sell)”.
8 February 2013
Buying a hotel? Why use a checklist?
Checklists are a great way to keep track of things when a lot of work needs to be coordinated among a lot of people.
Buying a hotel is usually a complex process with a lot of moving parts. Just keeping track of all the key people involved can be challenging in a fast-moving deal. And because a hotel involves both special purpose real estate and an operating business, there are many details requiring attention to successfully evaluate and transfer the hotel.
That’s why the hotel lawyers in JMBM’s Global Hospitality Group® usually start every hotel acquisition or hotel investment transaction by customizing a generic form of checklist to fit the specific transaction at hand. By clicking the link below you view or download one of the generic forms of hotel acquisition checklist that we often use as a starting point in preparing a customized checklist for each unique transaction.
The customized checklist helps us manage the acquisition or investment process, keep all the participants coordinated, and press forward to meet urgent milestones and deadlines.
[Read on to see how you can get your own free copy of our checklist . . .]
9 November 2012
Representations and warranties in the documentation of a hotel purchase and sale agreement (or agreement for purchase and sale of any type of hospitality property): What is the value of the seller’s representations and warranties? When does it matter?.
Hotels, restaurants, resorts, vacation ownership projects, spas, golf courses and other similar hospitality properties are different than most real estate. They involve operating businesses that are integrally intertwined with special purpose real estate.
So the documentation to buy or sell such a property (and business) needs to be different than that used for other commercial real estate. One of the areas that is most apparent is in the seller’s representation and warranties.
The article below is by hotel and timeshare lawyer David Sudeck, a senior member of JMBM’s Global Hospitality Group®, and someone very experienced in the purchase and sale of hotels, restaurants, resorts, vacation ownership projects, spas, golf courses and other similar hospitality properties. In a recent article, David wrote about representations and warranties in a purchase and sale agreement — what they are, what areas they cover, and what you want to get in a typical deal.
In this article, he writes about the value of these representations and warranties, hurdles to enforcing them and common terms used today.
This article is one of a series of insights that will be published initially as articles on the Hotel Law Blog at www.HotelLawyer.com and then they will be assembled into the HOW TO BUY A HOTEL handbook for our “We wrote the book™” series, much like the HMA Handbook and the Lenders Handbook for Troubled Hotels (see Resource Center at HotelLawyer.com for free copies).