Hotel Lawyer on hotel financing. Looking for money to develop a hotel mixed-use project? Need debt or equity financing to buy a portfolio of hotels or just a one-off deal? Seeking financing to reposition your hotel project? It doesn’t matter. . . On May 3, 2007, hundreds of hotel financing experts, hotel developers, and hospitality insiders will converge at the Sheraton Gateway LA Airport Hotel in Los Angeles to Meet the Money®.
Articles Posted in Outlook and Trends
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Hotel Financing looking at a new benchmark — The $100 billion deal.
Author of www.HotelLawBlog.com
25 April 2007
Hotel Lawyer on hotel financing summit. As more than 120 providers of capital — debt and equity capital for hotels — prepare to head to Los Angeles for the ultimate face-to-face summit with consumers of hotel capital in Los Angeles on May 3, 2007 at JMBM’s Meet the Money® Conference (for details, see www.MeetTheMoney.com) , a fitting benchmark has been surpassed. The $100 billion deal is now “on the table” and may be about to happen!
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I talked about it earlier here on www.HotelLawBlog.com when it still seemed unthinkable, and that was only January of this year. See Two deals that may change the lodging world forever and Size no longer matters . . . at least in the hotel industry. Is the entire hotel industry now in play?
In these postings, I mused that the new ability of the private equity guys to raise virtually unlimited amounts of capital suggests that even a $100 billion deal is possible, and noting that the entire capitalization of the hotel industry is less than the Equity Office deal completed earlier this year.
Well today, the Wall Street Journal has a breaking story that a consortium of banks led by Royal Bank of Scotland Group PLC has made an offer to buy ABN Amro Holding for 76 billion euros (or $103 billion), outbidding Barclay’s 64.9 billion euro offer. This deal does not involve any hotels, but raising capital is something a commodity business — it does not matter what the capital is for; the capital raising machine has surpassed all the old limits. Anything could be next.
What does this portend?
These are certainly exciting times. Hotel financing is about as readily available as it is likely to get, for big deals or small ones, for new development or refinancing of exiting product. That will be the entire focus at our Gateway to Hotel Finance in Los Angeles next week on May 3, 2007 at the Sheraton LAX. Whether you are a provider of capital or a consumer of capital — a hotel lender or a hotel borrower — if you can’t hook up with the right people next week, something must be wrong. Because next Thursday is time for Meet the Money® 2007. Hope to see you there.
Jim
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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 90 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.
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Hotel Lawyer: Disastrous wage and hour decision. California Supreme Court makes it a dark day for employers. Murphy v. Kenneth Cole Productions, Inc. (decided April 16, 2007)
Author of www.HotelLawBlog.com 17 April 2007
Hotel Lawyer with landmark labor and employment decision from the California Supreme Court on wage and hour issues. Wage and hour claims are serious matters for employers, because they typically involve class actions with lots of current (and former employees), and the claims can cover a long period of time. They are also particularly bad for the hospitality industry because so many employees are nominally “exempt” employees–managers or assistant managers–by their titles, but not under California legal standards. (See prior postings on www.HotelLawBlog.com under the Topic of “Labor & Employment” such as New law on who is a “supervisor” can even the playing field for employers a bit.)
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Hospitality Lawyer on “LIFESTYLE” hotel mixed-use development. Are Valencia and Miraval the new paradigms for “lifestyle” hotel mixed-use?
Author of www.HotelLawBlog.com
23 March 2007
Hospitality Lawyer on “LIFESTYLE” hotel mixed-use development. Hotel mixed-use has emerged as one of the few ways hotel developers may be able to make a new development economically feasible, with skyrocketing construction costs. It has also become one of the hottest things going as developers of other real estate uses (shopping centers, office, retail, residential and entertainment) discover the big “IRR Premiums” that may be harvested from well-planned and tightly integrated hotel mixed-use projects. (See, my earlier postings on www.HotelLawBlog.com from The Hotel Developers Conference® in Rancho Mirage. about how green hotels may be in all our futures, hotel mixed-use is the pass key to unlocking new development and bigger profits, and the perspectives of the most successful leaders in hotel mixed-use today)
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“Hotel Mixed-Use” . . . pass key to unlocking new development and bigger profits?
Author of www.HotelLawBlog.com
13 March 2007
Hotel lawyer on hotel mixed-use development. “Hotel Mixed-Use” . . . and how it can be the pass key to unlocking both new development and bigger profits was the entire focus of The Hotel Developers Conference™ in Rancho Mirage. Creative ideas flowed and mixed. Nuggets of valuable insight were gathered. Introductions were made. Deals were done. The opening session of The Hotel Developers Conference™ was covered in my last posting on www.HotelLawBlog.com. And here’s what happened in the second full day.
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What’s the price of gasoline have to do with the future of the lodging industry?
Author of www.HotelLawBlog.com
6 March 2007
Hotel lawyer on hotel industry trends. What’s the price of gasoline have to do with the future of the lodging industry? Some pretty interesting research tells us “More than you might think”!
In a recent posting on www.HotelLawBlog, I talked about the intimate relationship between the U.S. economy and the lodging industry. You may recall that cited studies of the past 30 years show that for more than 24 years there was a remarkable statistical correlation of 1.2 between U.S. Real GDP and the demand for hotel room nights at hotel in the United States. That means that if the U.S. economy grew by 1%, then lodging demand (i.e. demand for hotel room nights) grew by 1.2%. And although the correlation is a little lower now (around .7), there is still a very strong correlation between the Real GDP and the lodging industry.. (For more details see, As goes the economy, so goes the hospitality industry — the ineluctable elasticity of demand!)
I was quite surprised by the number of www.HotelLawBlog.com readers who sent me emails commenting on that recent blog. It is always nice to know that so many of you actually read these postings. But several of you wondered out loud — or commented — that you thought the cost of petroleum or perhaps some other items might also have a strong correlation with the lodging industry. As to the impact of petroleum prices, there is a strong correlation. As to other factors, there appears to be little or no correlation. So the price of gasoline actually does have a lot to do with the future of the lodging industry. How much impact? Let’s take a look.
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A billion here, a billion there. (Ho Hum) Isn’t it time we developed some hotels again? Will we get it right this time? Will Hotel-Enhanced Mixed-Use projects drive the market?
Author of www.HotelLawBlog.com
4 March 2007
Hotel lawyer on hotel and hotel mixed-use development. Wasn’t it only “yesterday” that a few hundred million dollars seemed like a lot of money and made the headlines? After Blackstone’s $39 billion purchase of Equity Office Properties deal was topped in deal size by Kohlberg Kravis Roberts’ bid for Texas Pacific Group (TXU) for about $45 billion, it almost seems like everyone yawns at “mere” billion dollar deals, much less something smaller. For example, did you notice any major headlines in the past couple of weeks about Winston Hotels being bought by Wilbur Investment for $850 million, or Apple Hospitality being bought by ING Clarion Partners for $890 million, or Hilton selling its Scandic Hotel chain to a private equity group for about $1.1 billion?
Nobody I know was particularly excited about these deals despite their size, which would have claimed headlines only a year ago. As I have commented before on www.HotelLawBlog.com, it really does seem that “Size no longer matters . . . at least in the hotel industry.”
But what does the big dollar focus on hospitality mean from private equity and celebrities– as we have discussed with such players as Bill Gates and Prince Al Waleed, Blackstone, Morgan Stanley in its acquisition of CNL Hotels & Resorts, Barry Sternlicht on his investments in China and India, as well as his launch of new brands such as the “1” and the Crillon, Paul Allen, Shaquille O’Neal, Donald Trump, Magic Johnson, Andre Agassi and Seffi Graf?
By themselves, these events show that smart money has tremendous confidence in the U.S. economy and in the lodging sector. They also validate the industry metrics of sustained profits and continued good times for at least several more years. But, combined with a few other factors, they also reaffirm the general belief that this is a great time to be developing hotels — particularly in a hotel mixed-use context — if it is done well. Let’s take a look at this and consider if we can get it right this time!
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Hospitality Lawyer — How good is the hotel business and how good can it get?
Author of www.HotelLawBlog.com
26 February 2007
Hospitality Lawyer on state of the hotel industry and its prospects. We are enjoying great times in the hospitality industry and the prospects are excellent that the good times will continue for at least several more years. But how good is it, and how good can it get? Let’s take a look!
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Hotel Lawyer — Why are Bill Gates and a Saudi Prince buying Four Seasons Hotels now?
Author of www.HotelLawBlog.com
13 February 2007
Hotel lawyer on the future of the hotel industry. Another milestone has been laid. The Board of Directors of Four Seasons Hotels Inc. — a public company — has formally accepted a $3.4 billion ($82 per share) purchase offer which surfaced on November 6, 2006 by a group of investors whose principals include Bill Gates, the Prince, and Isadore Sharpe, CEO of Four Seasons. It’s a fascinating deal! But what does it really mean?
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Hotel Lawyer: As goes the economy, so goes the hospitality industry — the ineluctable elasticity of demand!
Author of www.HotelLawBlog.com
8 February 2007
Hotel Lawyer on hotel fundamentals. One of the things that has fascinated me about the hospitality industry for more than 20 years now, is the close — almost intimate — relationship of industry performance to the U.S. economy’s performance. Some might say this is intuitive, that when the economy does well, all business does well. But that is not always true. There are some businesses which do better in hard times, like discount and bargain stores, and there are some that seem impervious, like ultra luxury goods. However the relationship of the lodging industry’s performance to the general economy, has been carefully documented by the experts, and it is worth noting. The implications are interesting.