Articles Posted in Outlook and Trends

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07 May 2019

Greetings from Los Angeles and the beautiful Hyatt Regency LAX!

Today, we kicked off Meet the Money® 2019 – the National Hotel Finance & Investment Conference hosted by JMBM’s Global Hospitality Group® – with the LIIC Top Ten. Presented by my friend, Mike Cahill, CEO and Founder of HREC and one of LIIC’s co-chairmen, the LIIC Top Ten reflects the perspectives of the industry’s most active members in the hospitality market.

— Jim

About the LIIC Top Ten

For the past 15 years, the members of the hotel industry’s preeminent think tank, “LIIC – The Lodging Industry Investment Council,” are annually surveyed to develop a list of the major hotel investment opportunities and challenges for the coming year. This exhaustive survey results in the LIIC Top Ten, a highly regarded profile of investment sentiment and attitudes for the lodging industry for the forthcoming 12 months. Altogether, the members of LIIC represent direct acquisition and disposition control of well over $60 billion of lodging real estate.

Members are currently extremely active and have the pulse of the market, with 64% of LIIC hotel investors having successfully sold a hotel in the last 12 months and 50% purchased a lodging asset. In defiance of any late cycle concerns, 93% are looking to buy more hotels over the next 24 months.

The hospitality industry’s most influential investors, lenders, corporate real estate executives, REIT’s, public hotel companies, brokers and significant lodging equity sources are represented on the Council. LIIC serves as the leading industry think tank for the lodging real estate business (www.liic.org).

2019 LIIC Top Ten Survey Results: CONTINUE READING →

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24 April 2019

LOS ANGELES—JMBM’s Global Hospitality Group® will host Meet the Money® national hotel finance and investment conference May 6-8 at the Hyatt Regency LAX in Los Angeles.  Now in its 29th year, this annual event will bring together hotel owners, operators, developers, consultants, investors, brands, lenders and other capital providers to discuss current developments in the industry as well as strategies for the future.

“Our line-up of more than 70 speakers include top hospitality leaders who will share their expertise and deliver essential information for maximizing potential opportunities,” said Jim Butler, Chairman of JMBM’s Global Hospitality Group®. “Attendees will also have the opportunity to meet some of the most active capital providers in the market for both existing and new hotel construction,” he said.

Free to all who register is a special pre-conference session on Monday afternoon May 6th – Meet The Equity: Investment Bootcamp – Preparing and Executing the Capital Raise. This interactive workshop will be led by Jonathan Falik of JF Capital Advisors, Guy Maisnik, Vice Chair of JMBM’s Global Hospitality Group®, and private equity experts who will explain how they evaluate requests for capital, what makes certain deals attractive to them, and why they reject projects.

Some of this year’s panel discussions and special presentations, include:

  • Views from the Executive Suite: What’s Important Now?
  • Creative Financing: Mezz and Beyond
  • Is Select Service Still Everyone’s Favorite? Where Does it Go from Here?
  • Developing, Redeveloping and Repositioning to Optimize Value
  • Winning Strategies for Buying and Selling Hotels
  • Construction Financing Today

“Our speakers are passionate about the hospitality industry and we look forward to the enthusiastic exchange of ideas that happens every year at Meet the Money,” said Butler. “We look forward to seeing our long-time industry friends and making new ones.”

Registration can be made through the Meet the Money® website. CONTINUE READING →

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12 February 2019

Recently, my partner, Guy Maisnik, and I spoke about hotel retail mixed-use development with Kelsi Maree Borland of GlobeSt.com. Her article, Why Retail Owners Are Partnering With Hotels ran with the subtitle, With retail evolving to be more experience-driven, retail owners are finding the benefits of adding boutique hotels to shopping centers.

Retailers adding hotels to the mix is nothing new – but they may be more motivated than ever. The Hotel Law Blog has been covering hotel mixed-use projects — where the hotel provides the catalyst for social activity at shopping centers, office complexes, and residential buildings — since 2009. At that time, retail sales were suffering due to the Great Recession.

From GlobeSt.com:

“The Great Recession taught retailers that the old mantra was dead”, says Maisnik. “’If you build it, they will come’ may work in the movies but not for increasing retail sales. There were just too many stores and they were boring, outmoded and couldn’t attract shoppers. The drivers for adding hotels to retail projects have not changed in the last 10 years but the force of the drivers and their impact has increased tremendously. Failure to adopt and grow to meet consumers’ desires can be the death knell for retailers.”

Add to this the spectacular growth of online sales, which accounted for 19.1% of total retail sales in 2018, and it is no wonder that brick-and-mortar retailers are hurting. Some, like Sears and JC Penney are scrambling for survival.

From GlobeSt.com:

“To survive the challenges from online retailing, brick and mortar retail will need to create exciting environments for consumers, where art, music, events, convenience and lifestyle provide a magnet for consumers. Properly done, hotels can be an important part of creating this magic, but hotels provide new levels of complexity in mixed-use projects with their own unique norms, customs, and players.” Jim Butler

What retail properties are good candidates for a hotel, and what should owners interested in including a hotel look for?

To create a great mixed-use project, each component of the project must be strong and must be tested against the fundamentals for that type of real estate use. Just as retail developers go through their checklists to determine what will make a great retail center, if there is to be a hotel, office, entertainment, or residential component, each piece of the puzzle must be tested against its own unique criteria for success. This is particularly true for hotels which need demand, and require a rigorous feasibility analysis. CONTINUE READING →

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23 January 2019

Hotel Lawyers share tax news for those owning interests in foreign entities.

The tax lawyers at JMBM have significant experience in advising clients with international business interests, and keep them informed of developments that affect their businesses. Recently, JMBM issued a Tax Alert regarding the obligations of those owning an interest in a foreign entities to determine whether a repatriation tax payment must be made under the Tax Cuts and Jobs Act. Yes, the IRS imposes a penalty for failure to report, so compliance is critical. I am pleased to share this information with you, which is provided by my partner, Scott Harshman, Chairman of JMBM’s International Tax Group.
Tax Alert: Foreign Entity Ownership Compliance
Don’t Ignore the Repatriation Tax
by
Scott A. Harshman
 

In 2017, if a client owned an interest in a foreign entity (directly or indirectly through a tiered entity structure), then an evaluation should have been done to determine whether the client owed a repatriation tax under the Tax Cuts and Jobs Act (TCJA).  Many clients, and their tax advisors, are unaware of this obligation and have failed to pay this tax.  The repatriation tax was meant to tax accumulated earnings of a controlled foreign corporation.  For clients that own an interest in multiple foreign entities, the accumulated earnings may offset one another from each entity.  Two tax rates potentially apply, 15.5% and 8%.

The rules are complex, but in simple terms, if a U.S. person owns an interest in a controlled foreign corporation or owns any interest in a foreign corporation through a domestic corporation, they likely should have paid the repatriation tax beginning in 2017.  A special election may be made to pay this tax in 8 installments. Additionally, an election under IRC Section 962 would treat an individual, trust or estate shareholder as a corporation to potentially receive more favorable tax treatment.  This analysis and election must be done each year.  A controlled foreign corporation is a foreign corporation (some entities may be a corporation for U.S. tax purposes even if called something else) where U.S. persons who own more than 10% also collectively own more than 50% of the entity (but note that the repatriation tax applies to any domestic corporation that owns a foreign entity).  Constructive ownership rules apply and generally attribute stock ownership from family, entities, trusts and estates.

Now that we are in 2019, tax professionals are starting to understand the new tax rules for foreign entity reporting and disclosure, including the 2017 repatriation tax under IRC Section 965 (such as those described above).  The IRS continues to provide new guidance in this area to help tax advisors apply these new rules. CONTINUE READING →

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Recently, a Chinese government delegation visited Jeffer Mangels Butler & Mitchell LLP.  The delegation included some of the highest-ranking officials from a top Chinese government agency – “China State Administration of Foreign Exchange” – an agency that directly oversees the investment of $3 trillion of China’s foreign reserve. CONTINUE READING →

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A hotel lawyer brings together numerous legal disciplines, depending on the hospitality project. That’s why the Global Hospitality Group® is part of a full-service law firm. My partners at Jeffer Mangels Butler & Mitchell LLP (JMBM) provide first-rate services to our hospitality clients and I am pleased that their efforts were recognized today in U.S. News & World Report’s list of Best Law Firms.

– Jim

U.S. News & World – Best Law Firms® Recognizes JMBM as 2019 “Best Law Firm”

Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce it has been recognized as a 2019 “Best Law Firm” by U.S. News & World Best Lawyers®, which recognizes the top law firms in the country for professional excellence. This is the ninth year for JMBM’s inclusion as a Best Law Firm.

“This recognition is especially important to us as it is based on the views of our clients and peers,” said Bruce P. Jeffer, JMBM’s Managing Partner. “We are committed to focusing on our clients’ objectives and providing outstanding service.”
JMBM’s Trusts & Estates Group achieved National Tier 1 – the highest ranking possible – in Trusts & Estates Law, underscoring the Group’s unique combination of exemplary service and breadth of knowledge in trusts and estates law.

The Firm also earned Metropolitan Tier 1 rankings in the following areas: CONTINUE READING →

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Jeffer Mangels Butler & Mitchell LLP (JMBM) has announced the formation of its Legal Cannabis Group, which provides clients with all the resources and benefits of a full-service law firm on business matters involving legal marijuana and cannabis-related substances. The lawyers comprising JMBM’s Legal Cannabis Group focus on the needs of business and property owners, developers, investors, lenders, commercial landlords and tenants, growers and producers, processors, dispensaries and sellers, and creators of new cannabis products.

“Although medical and recreational cannabis has been legalized in more than half of the nation’s 50 states, including California, businesses still have trouble finding experienced lawyers with mainstream law firms to represent them,” said Benjamin M. Reznik, Chair of JMBM’s Government, Land Use, Environment & Energy Group. “In addition to critical government approvals, compliance and permits, we assist marijuana and cannabis-related businesses with virtually all of the legal issues faced by any thriving business.”

For example, JMBM’s lawyers assist clients with corporate and real estate transactions, as well as on “bread and butter” business structures, contracts, securities offerings, leases, financings and intellectual property matters. JMBM’s lawyers also handle all kinds of labor and employment, tax and litigation (from routine disputes to bet-the-company matters).

Contacts:

Benjamin M. Reznik
BMR@jmbm.com
(310) 201-3572

Jim Butler
jbutler@jmbm.com
(310) 201-3526

About JMBM’s Legal Cannabis Group
JMBM’s Legal Cannabis Group advises marijuana and cannabis-related businesses in the full range of business issues including regulatory compliance and permitting, business transactions, and litigation in California. Our practice focuses on the needs of property owners, developers, investors, lenders, commercial landlords, growers and producers, processors, dispensaries and sellers, and creators of new cannabis products.

About JMBM
JMBM is a full service law firm with offices in Los Angeles, Orange County and San Francisco. For more information go to www.jmbm.com.

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19 June, 2018

Meet the Money® is a productive conference with a casual atmosphere; the executives and other hotel industry representatives who attend often speak candidly about their expectations for hotel finance, development and investment throughout the upcoming year.

The short video below highlights how some of our attendees feel about 2018—watch and find out what some of the industry’s most well-known brands, banks, consultants, mangers and developers have to say about what’s on the horizon.

CONTINUE READING →

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25 May 2018

Click here for the latest articles on Data Technology, Privacy & Security.

The European Union’s General Data Privacy Regulation, rules protecting the privacy of personal information, has gone into effect and impacts every company that does business in the EU. This will impact hotel owners, developers, brands, operators and managers–any company with a hotel property in the EU or that collects information from EU citizens must adhere to the new regulations.

What does that mean for your business, and where should you start the process of compliance? Senior member of JMBM’s Global Hospitality Group® and Co-Chair of the Firm’s Cybersecurity & Privacy Group Bob Braun summarizes the issues, below.
Why should I Care About GDPR?
by
Bob Braun
The importance of May 25, 2018. If you are reading this, you have probably been inundated with emails from companies announcing that they have adopted new and better privacy and security policies and procedures. This isn’t a coincidence – as of May 25, 2018, the EU’s General Data Privacy Regulation (GDPR), requires every organization that does business in the EU, or that collects information from EU citizens, to guarantee the privacy and accuracy of personal information. While the purpose of the GDPR is to strengthen and unify data protection for all individuals within the EU, its effect is worldwide; every organization that does business in the European Union or collects personal information from individuals in the European Union is subject to this regulation. CONTINUE READING →

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07 May 2018

LOS ANGELES—Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce that hospitality lawyer Jeffrey T. Myers has joined the Firm as a Partner in JMBM’s Global Hospitality Group® and Real Estate Department.

Myers’ practice focuses on the development, financing, acquisition, and operation of hotels, resorts and other hospitality properties. His clients include developers, capital providers, commercial lessors, and tenants. He has assisted clients in a full range of hospitality projects including hotels, resorts, casinos, restaurants, nightclubs, condo hotels, and mixed-use properties.

“We are thrilled to have Jeff join our team. He is a talented lawyer who further strengthens our capabilities and brings natural synergies to our group,” said Jim Butler, Chair of JMBM’s Global Hospitality Group. “Now Jeff can offer his clients assistance with important specialties such as ADA defense, cybersecurity, labor & employment (including union contract negotiations and union avoidance), land use, and litigation.”

Myers’ experience includes representing a national developer in the negotiation of a series of agreements for the development, management and licensing of a to-be-developed ultraluxury resort and spa in the Papagayo Peninsula region of Costa Rica; representing one of the largest hospitality REITs in the country from its inception through the acquisition, financing and management of a $1 billion portfolio of hotel assets; representing a major institutional developer in its collection of celebrity-chef curated restaurants for the Hudson Yards project in New York; and representing a sovereign investment company in connection with its investment and ownership of the largest privately funded mixed-use development in U.S. history, including all casino and gaming related structuring and licensing, and the negotiation of management and development agreements for each of the hotel and casino components.

CONTINUE READING →

Contact Information
Jim Butler, Chairman
Global Hospitality Group®
Jeffer Mangels Butler & Mitchell LLP
(310) 201-3526 • jbutler@jmbm.com
www.HotelLawyer.com

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