Articles Posted in Outlook and Trends

Published on:

31 March 2011

Debt and equity financing for hotels is back! Hotel transactions are rolling again!

And the Global Hospitality Group® of Jeffer Mangels Butler & Mitchell LLP (JMBM) has announced the 2011 Meet the Money® hotel finance conference to explore the latest opportunities in the capital stack with “Bridging the Gap and Facilitating the Flow of Capital.”

We hope you can join us May 2-4, 2011, at the Sheraton Gateway in Los Angeles for this important conference. Here is how to get all the information on time, place, program, speakers, and registration information. It is time to sign up now.

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Published on:

31 January 2011

Hotel Lawyer on the state of the hotel industry. At the ALIS conference last week, Smith Travel gave a great overview on the final results for 2010 as well as its outlook for 2011 and 2012. The numbers are very interesting!

Jan Freitag made the presentation at the ALIS conference. According to him, at the end of 2010, there were 52,000 hotels in the United States providing a total room supply of 1.7 billion rooms (a 2% increase in supply over 2009).

Great increase in demand. The demand for room nights grew a staggering 7.8% returning to the pre-bubble peak of 1 billion room nights sold during 2010, but with an increased supply of hotel rooms taking a share of the demand, occupancy only increased 5.7% to 57.6%, below the magic 60% occupancy level. Smith Travel hailed the demand growth, but noted that it does not expect to see this outsized growth again in the foreseeable future. In fact, as noted below, demand growth for the next two years is projected to be below 2% per year.

Disappointing lack of any meaningful rate growth. Unfortunately, the dramatic demand growth was not accompanied by a comparable increase in the average daily rate or ADR. In 2010, ADR was flat (actually down -0.1%) at $98, and still below the important $100 level. RevPAR increased 5.5% to $56.50 and room revenues increased 7.6% to $99.5 billion.

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Published on:

27 January 2011

Hotel Lawyer with the pulse of the hotel industry from the ALIS conference in San Diego

After spending the past few days in San Diego at the Americas Lodging Industry Summit or ALIS conference, the hotel lawyers from JMBM’s Global Hospitality Group® have a pretty good sense of the “pulse” of the industry. Although attendance at the conference was down significantly from last year, as cost-cutting continues, the mood was decidedly more optimistic, and lots of people were actively working on deals or projects.

We thought the mood reflected a sense of “Great Expectations” – a relatively optimistic sense that the worst is clearly behind us, and that things will only get better from here, however slowly. Debt capital has reemerged for existing projects with established cash flows, and a decent project may get quite a few competitive bids. Property transactions are also happening across the spectrum. Foreign investment, particularly from China is fueling some of the acquisition activity. The REITs and equity buyers are also very active.

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Published on:

8 January 2011

Hotel Lawyer with advice for 2011: Hotel Investors, take note!

Like it or not, the stage is now set. This is the time. The year 2011 will present one of the greatest hotel buying opportunities for many years to come. And if you are not buying hotels this year, you will miss the window created by one of the biggest economic downturns in American history. What are the key indicators as to why this is a great time to by a hotel? And is price alone enough to justify the purchase, or are there other factors you need to think about? If the market is heading north, can you still make a bad purchase?

Hotel Lawyer Guy Maisnik, Vice Chairman of JMBM’s Global Hospitality Group®, who was the lead attorney for the Receiver in the recent sale of the Sheraton Universal Hotel, answers these questions and more.

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Published on:

5 January 2011

Jeffer Mangels Butler & Mitchell LLP (JMBM), one of California’s foremost full-service law firms, today announced that its Global Hospitality Group® facilitated the sale of the Sheraton Universal Hotel to Shenzhen New World Group Co. JMBM represented the receiver and structured the sale so that the 20-story, 451 room hotel could be conveyed while the hotel was in receivership.

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Published on:

Bloomberg news interview on investment outlook for 2011.

Is 2011 the “last window” for hotel investment in this cycle? Where are the biggest investment opportunities? What do you need to know about hotel investment now?

I thought you might like to hear my interview today on Bloomberg Law on Demand, hosted by Lee Pacchia. Click here to listen to the 10-minute podcast.

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Published on:

7 December 2010

It is always nice to be quoted in the New York Times, especially in a story that includes so many industry heavy hitters, as was the case in the article, After a Rough Night, Hotel Investors Are Waking Up. Reporter Janet Morrissey’s article provides a thought-provoking picture of the current unprecedented hotel investment landscape.

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Published on:

12 October 2010

Hotel Lawyer with a cold splash of realism from new economic data! If you are not ready for the “long haul,” it is time to reassess your strategies . . .

The hotel lawyers of JMBM’s Global Hospitality Group® believe investors, borrowers and lenders should assess their options and develop their strategies based on realistic assumptions and the latest hard data. If you haven’t seen the latest, this is worth looking at.

On October 6, 2010, the International Monetary Fund or IMF released its latest appraisal of the situation for real estate on a global basis (in a report entitled World Economic Outlook October 2010 Recovery, Risk, and Rebalancing). The conclusion was that the prospects in the global real estate sector are “dismal,” with a downturn that could last eight years.

“Especially in the United States, given the limited success of mortgage modification programs and the shadow inventory from foreclosures and delinquencies, this has renewed fears of a double dip in real estate markets. A lot will depend on the path of economic recovery: if employment creation remains low, risks of a double dip in housing naturally increase,” the IMF said.

But the IMF data is not all that is new. Let’s take a look at some other significant data points, including those from Fitch, Deutsche Bank and Atlas Hospitality.

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Published on:

22 September 2010

Hotel Lawyer with the latest pulse of the hotel industry from The Lodging Conference at the Arizona Biltmore in Phoenix Arizona.

The title of this blog says it all. This is the time and place to be – The Lodging Conference in Phoenix, Arizona. We called it at Meet the Money® in May, 2010, but the tide that started turning at the end of the first quarter 2010 has continued its flow and it seems to be unmistakable now. I expect to hear some very exciting things at the Conference here in the next few days.

I would describe the mood of the pre-conference gathering that started this evening as very “EXPECTANT.” Expecting more and better in both transactions . . . and eventually . . . perhaps more slowly . . . better in the fundamentals of the hotel industry.

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Published on:

30 July 2010

Hotel Lawyer with a name change. JMBM’s Global Hospitality Group® is part of a vibrant law firm. Today, that firm announced that it is changing the firm name, but we will still be known as “JMBM.” Here’s the story.

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