Hotel Law Blog

Published on: February 13, 2007

Hotel Lawyer — Why are Bill Gates and a Saudi Prince buying Four Seasons Hotels now?

By Jim Butler and the Global Hospitality Group®

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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Published on: February 8, 2007

Hotel Lawyer: As goes the economy, so goes the hospitality industry — the ineluctable elasticity of demand!

By Jim Butler and the Global Hospitality Group®

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.

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Published on: February 1, 2007

Hotel Lawyer — “Hotel Industry Snapshot” from ALIS

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
1 February 2007
Yesterday, I shared the first in a series of reports and observations from the recent Los Angeles hotel investment conference (ALIS). You may find it as interesting as I do to hear industry leaders describe current issue in their own words. If so, check out yesterday’s posting: “Notable quotables from hotel industry thought leaders 2007.”
But today, I would like to take a different approach, reflecting my personal observations on the state of the hotel industry taken from a number of Conference panels, a lot of one-on-one meetings with industry leaders, and a few hours with the Lodging Industry Investment Council — the hotel industry’s think tank.

Captured here for www.HotelLawBlog.com is my “Hotel Industry Snapshot” as of February 1, 2007 — a perspective on the issues and developments that seemed to be the most important around the ALIS Conference. They may portend future opportunities . . . or challenges to be overcome. You will probably hear a lot more about them in the near future.

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Published on: January 30, 2007

Hotel Lawyer — Notable quotables from hotel industry thought leaders 2007

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
31 January 2007
Hotel Lawyer on what the top names in the industry are saying now. In my recent blog entries, we have looked at how every hospitality company could be in play — from InterContinental Hotels to Marriott, Hilton and Starwood, the most interesting features of 2006, explored financing hotel projects in 2007, and talked about the explosion of international hotel investment — particularly in places like Mexico, Costa Rica, the Caribbean, China, India, and Europe.

But last week, I attended the Los Angeles hotel investment conference (ALIS) and promised to report on the pulse of the hotel industry. So here is the first followup on that promise — and the first in a series of reports on www.HotelLawyerBlog.com about what’s going on in the industry. This report is my collection of notable quotes I captured from hotel industry thought leaders at the ALIS Conference.

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Published on: January 29, 2007

Size no longer matters . . . at least in the hotel industry. Is the entire hotel industry now in play? What the experts have to say.

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
29 January 2007
Hotel lawyer on private equity investments in the hotel industry. In my most recent article, I talked about two deals that could profoundly affect the very makeup and direction of the hotel industry. (See, “Two deals that may change the lodging world forever“). Of course, these two transactions are the leveraged buyouts of Equity Office Properties (EOP) and CNL Hotels & Resorts (CHL).

With recent takeover rumors circling InterContinental Hotels Group (IHG), I have recently written on www.HotelLawBlog.com about what these rumors mean. (See, “What do the InterContinental takeover rumors mean? Why IHG? Why now? Who will win the bid?“) Some have been saying recently that even Hilton is now on the block. Are the CNL and EOP deals the harbinger for the entire hotel industry — that every major hotel company could be in play?

Here’s why size may no longer impose any limit on acquisitions. . . and why Marriott, Hilton, Starwood, and all the other hotel companies could be up for grabs.

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Published on: January 29, 2007

Two deals that may change the lodging world forever.

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
28 January 2007
Hotel Lawyer on hotel finance. History is being made. The biggest leveraged buy out ever keeps getting bigger. Sam Zell has orchestrated an auction for his Equity Office Properties. And the latest bid from the Blackstone Group is $54 per share, bringing the deal value to $38.3 billion and topping the prior bid from Vornado.

At the same time, one of the biggest hotel deals in history — perhaps small change compared to the Equity Office Properties deal but very significant in its own way — has been announced with the $6.6 billion acquisition of CNL Hotels & Resorts by Morgan Stanley and the contemporaneous spin off of $2.4 billion of hotel assets to Ashford Hospitality Trust Inc.

How could these two transactions affect the lodging world, and what is the impact beyond the immediate transactions themselves?

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Published on: January 8, 2007

Hospitality Lawyer — The plays to make successful international hotel investments

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
8 January 2007
Hospitality Lawyer on international hotel investments. In a number of recent postings on www.HotelLawBlog.com, I have focused on the attractiveness of international hotel investments and some of the big names pouring investment overseas. Some of the hot markets include Mexico, Costa Rica, the Caribbean, Spain, Italy, London, Saudi Arabia, Dubai, China and India. In Why we’re building hotels in India like crazy, I focused entirely on India, an explosive market that has often been overshadowed by opportunities in China. In announcing plans for Starwood Capital to invest a half billion in India alone, Barry Sternlicht says that there is so much demand that he is targeting an average annual return of 20% on investments in India!

With all the exciting potential for hotel development in these booming markets, it is tempting for developers and investors to rush in to “scoop up the profits”. But before they do, it would be wise to remember that risk is usually commensurate with reward. At the very least, they should ask: “What is the best way to make successful foreign hotel investments?” Here are a few thoughts from www.HotelLawBlog.com . . .

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Published on: January 7, 2007

How will you finance your hotel project in 2007? Part II

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
7 January 2007
Hospitality Lawyer on hotel finance in 2007. We recently featured our annual expert panel talking about “How will you finance your hotel project in 2007?” Today, I am delighted to present the thoughts of Patrick O’Neal, one of the industry’s’ real lender icons, whether in workouts or CMBS loan production. Patrick has been a great friend and client for more years that either of us probably care to count, but I have always found Patrick’s thoughts, to be unnervingly candid, full of humor and remarkably “spot on” in terms of their accuracy. PNC Real Estate Finance and the hotel world are very lucky to have him! So what does Patrick have to add to the perspectives we have just enjoyed?

For all of our www.HotelLawBlog.com readers, and those who would like to meet Patrick — and our other leading hotel industry capital providers — you will want to join us for the 17th annual Meet the Money® conference on May 3, 2007 in Los Angeles. Sign up now.

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Published on: January 4, 2007

Hospitality Lawyer — How will you finance your hotel project in 2007? Part I

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
4 January 2007
Hospitality Lawyer on hotel finance in 2007. Debt and equity financing of hotels and hotel mixed-use projects is critical and can be very challenging. Our clients take hotel financing seriously, and so do we. That’s why we host the annual JMBM Industry Outlook Roundtable every January and our Meet the Money® conference every May.

With the legacy of Meet the Money® propelling us forward, I was delighted to join with leading hotel industry experts for JMBM’s “Outlook 2007, Hospitality Roundtable.” They reflected on a very interesting year just passed and pulled out their crystal balls to see what would happen in 2007. I am pleased to share their take on what’s going on with hotel finance with the readers of www.HotelLawBlog.com. Some of it might surprise you.

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Published on: January 3, 2007

Hotel Lawyer — Top Picks for 2006

By Jim Butler and the Global Hospitality Group®

Author of www.HotelLawBlog.com
3 January 2007
Hotel Lawyer — Top Picks of 2006. Yes, 2006 has been a record year for many in the hospitality industry, and for the hotel lawyers at Jeffer, Mangels, Butler & Marmaro LLP. As we have already given our Outlook for 2007, we thought it might be interesting to look back on our Top Pick articles from 2006 from www.HotelLawBlog.com.

The Top Picks articles are organized by the major TOPICS on the Blog. We generally tried to select just the top two or three articles for each TOPIC. It was a major struggle to decide where to make the cutoff. If you want more information on a particular TOPIC, you can go to www.HotelLawBlog.com, and search for all articles on that TOPIC. To do that, just scroll down the right hand side, and below the (free) subscription and RSS Feed buttons is the Browse search engine that enables you to sort by TOPIC (or date, or key words, etc.).

Here they are . . .

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Jim Butler

Jim Butler is recognized as one of the top hotel lawyers in the world. He devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM’s Global Hospitality Group® — a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion.
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Robert Braun

Robert Braun is a partner in JMBM's Corporate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Bob represents owners in both transactional and operational issues. He advises clients with respect to business formation, financing, mergers and acquisitions, venture capital financing, joint ventures and strategic partnerships. He has represented hotel owners in the negotiation of several hundred management agreements, as well as spa management and franchise agreements. Bob also advises hotel owners regarding telecommunications, software, internet, e-commerce, data processing and outsourcing agreements. To read Bob's articles, go to www.HotelLawBlog.com and select "Management Agreements." For more information, please contact Bob Braun at 310.785.5331 or rbraun@jmbm.com.

Marta Fernandez

Marta Fernandez is a partner in JMBM's Employment and Labor Department and a senior member of JMBM’s Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. As a management labor lawyer with more than 20 years of experience, Marta specializes in representing hospitality industry clients in all aspects of labor and employment including labor-management relations such as union prevention, collective bargaining for single as well as multi-employer bargaining units, neutrality agreements and defense of unfair labor practice charges before the NLRB. She defends employers in administrative and litigation claims, such as employee claims of sexual harassment and discrimination and counsels clients in preventative strategies such as executive training, arbitration enforcement, and policies and procedures. To read Marta's articles, go to www.HotelLawBlog.com and select "Labor & Employment." For more information, please contact Marta Fernandez at 310.201.3534 or at mfernandez@jmbm.com.

Guy Maisnik

Guy Maisnik is a partner in JMBM's Real Estate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Guy's deep and broad transactional practice includes complex real estate finance and venture capital transactions, including project finance, commercial finance, leveraged leasing and real estate acquisitions. He assists clients with development, leasing and disposition, loan portfolio acquisitions, loan and debt restructure, workouts and real estate exchanges. Go to www.HotelLawBlog.com for current information in these areas. For more information, please contact Guy Maisnik at 310.201.3588 or mgm@jmbm.com.

David Sudeck

David Sudeck is a Partner in JMBM's Real Estate Department and a senior member of JMBM’s Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. David has significant experience in the vacation ownership arena, focusing on the formation and registration of condominiums, timeshares and fractional interest regimes. He negotiates hotel, spa and restaurant management agreements, and assists client in the development, acquisition, sale and leasing of hotels, golf courses and restaurants. For David's take on current issues in the timeshare arena, go to www.HotelLawBlog.com and click on the topic, "Timeshare." For more information, please contact David Sudeck at 310.201.3518 or dsudeck @jmbm.com.

Robert Kaplan

Robert Kaplan is a partner in JMBM's Bankruptcy, Insolvency and Restructurings Group and a senior member of the Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Bob represents lenders, special servicers, hard money lenders, community banks, national banking associations, distressed debt investors, and equity investors, positioning them for the best possible outcome by acting expeditiously to preserve value and increase cash flow. His industry experience and his knowledge of the current capital markets -- where distressed assets often include complex deal structures and securitized loans -- allows him to bring creative and effective strategies to the table. When aggressive litigation is the best strategy, he is a vigorous and effective advocate for his clients. Bob represented the securitized lender in the Chapter 11 bankruptcy case filed by the Clift Hotel in San Francisco, and in the subsequent negotiations and successful sale of the loan to a third party. The lender -- acting by and through GMAC Commercial Mortgage Corporation as special servicer -- was the holder of a $60 million loan secured by a Deed of Trust on the Clift Hotel. He has also served as counsel to CapMark, J.E. Robert Company, Inc., AMRESCO Management Inc. and Midland Loan Servicer in their capacity as special servicers on troubled hotel loans in CMBS pools. For more information, contact Robert Kaplan at 415.984.9673 or rkaplan@jmbm.com.

Martin Orlick

Martin Orlick is a partner in JMBM's Real Estate Department and a senior member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Marty specializes in representing hospitality industry clients in Americans With Disabilities Act (ADA) compliance and defense. He has represented more than 500 businesses in ADA issues, many of them hotels and restaurants, as well as hotel mixed-use properties. Marty is a member of the American College of Real Estate Lawyers (ACREL) and a frequent speaker on the ADA and other topics. To read Marty's articles, go to www.HotelLawBlog.comand select "ADA." For more information, please contact Marty Orlick at 415.984.9667 or morlick@jmbm.com.

Scott Brink

Scott Brink is a senior member of JMBM's Global Hospitality Group® and a partner in JMBM's Labor & Employment Law Department. Scott is a management labor lawyer with more than two decades of experience representing employers in all aspects of labor relations and employment law including union prevention, collective bargaining negotiations, defense of unfair labor practice charges before the NLRB, wrongful discharge litigation, individual and class action employment discrimination and wage-and-hour claims, sexual-harassment litigation, arbitrations, personnel policies, California wage and hour law, and employee discipline and discharge. An experienced trial attorney, Scott has litigated a number of high-profile and complex cases involving a wide range of labor and employment law matters. For more information, contact Scott Brink at RSB@jmbm.com or 310.785.5365.

Travis Gemoets

Travis Gemoets is an experienced trial attorney and represents management in all facets of labor and employment law, including wage/hour class actions, claims of discrimination, harassment, wrongful termination, trade secrets and unfair competition, union/management relations and workplace violence. He is a member of JMBM's Global Hospitality Group(r), in which capacity he negotiates union contracts and resolves labor disputes throughout the country, defends class action claims, develops strategies for the mass onboarding and separation of employees, and recommends proactive changes to employers' policies and practices in order to minimize potential liability risks. Reach him at 310.785.5387 or tgemoets@jmbm.com.

Mark S. Adams

Mark S. Adams is an experienced trial lawyer and a member of JMBM's Global Hospitality Group® and Chinese Investment Group™. He focuses his practice on business litigation including contracts, corporate and partnership disputes, and hospitality disputes and litigation. On behalf of hotel and resort owners, Mark has successfully litigated the termination of long-term, no-cut, hotel management agreements, franchise agreements, fiduciary duty issues, investor-owner disputes, TOT assessments, and more. He has wide-ranging trial experience in a variety of commercial disputes, including complex multi-party litigation and class actions. He has tried numerous cases in state courts, federal courts, and in domestic and international arbitrations, and is a frequent author and speaker on trial practice. Mark's trial wins have been covered by Forbes, Reuters, and other publications. He has obtained two of California's annual 50 largest jury verdicts in the same year. Mark has taken or defended nearly 1,000 depositions throughout North America, Europe and the Middle East. He has been quoted as an expert on noncompete agreements in the Wall Street Journal. For more information, contact Mark at 949. 623.7230 or markadams@jmbm.com.

Bennett Young

Bennett Young is a partner in JMBM's Bankruptcy, Insolvency and Restructurings Group and a senior member of the Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. His clients include lenders, financial institutions, secured and unsecured creditors, distressed investment funds, businesses, receivers, special servicers and creditors' committees. Ben represented the owner of a partially completed multi-billion dollar resort property in the restructuring of its finances and has represented lenders to hotels and casinos. For more information, contact Ben Young at 415.984.9626 or byoung@jmbm.com

Sheri Bonstelle

Sheri Bonstelle is a partner in JMBM's Government, Land Use, Environment and Energy Department, and a member of JMBM's Global Hospitality Group®. She represents owners and developers in land use, zoning, environmental, litigation and construction matters. She manages all aspects of the entitlement process, including representing clients before local and state agencies, commissions and councils. Sheri also represents clients in a variety of land use and real estate litigation matters in state and federal courts, including cases arising under CEQA and other environmental laws. Her hotel experience includes handling the adaptive reuse of an historic office building as a luxury boutique hotel. For more information, please contact Sheri Bonstelle at 310.712.6847 or SBonstelle@jmbm.com.

Kevin McDonnell

Kevin McDonnell is a partner in JMBM's Government, Land Use, Environment and Energy Department, and a member of JMBM's Global Hospitality Group®. Kevin represents developers and owners of hotels in a broad range of land use and zoning issues including entitlements, code enforcement, easements and parking requirements, as well as related Parcel Map and Tract Map subdivision issues. His hospitality experience includes hotels, condo-hotels and mixed-use projects. A registered Civil Engineer and Structural Engineer in California, and a former building official for the City of Los Angeles, Kevin brings unique experience and insight in Zoning and Building Code applications and Code Enforcement issues. For more information, please contact Kevin McDonnell at 310.201.3590 or kkm@jmbm.com.

Jamie Ogden

Jamie Ogden is a tax lawyer at Jeffer Mangels Butler & Mitchell LLP. He advises individuals and businesses on a range of tax planning, tax controversy and estate planning matters. Jamie’s experience includes all tax aspects with respect to the hospitality industry, including acquisitions and dispositions (including Section 1031 exchanges), financing and management agreements. He also serves as lead tax counsel on M&A transactions, financing, internal corporate restructurings and deferred compensation matters. Jamie also works frequently with litigators on the tax aspects of litigation, judgments and settlements. Jamie has extensive experience with foreign compliance matters, including each variation of the IRS amnesty programs. In addition to his experience in private practice, Jamie also brings several years of service from both state and federal government. For more information, contact Jamie at JOgden@jmbm.com or 310.201.3510.

Wei Deng

Wei Deng is General Counsel of Bosen American Capital, Inc. where in addition to his legal duties, he is responsible for sourcing, evaluating and proposing United States investment opportunities to the company. Wei was previously with JMBM, where he focused on transactional and litigation matters.

Jay Thompson

Jay Thompson has extensive experience representing private companies, business owners, family offices and investors in mergers and acquisitions, private equity and venture capital transactions and private securities offerings. Jay serves as general counsel to many of his clients, their management, and board of directors, helping to shape and execute their business strategies, facilitate growth and liquidity, as well as to advise them on day-to-day legal and other strategic issues. He is known for his practical approach to business issues. Contact Jay at JThompson@jmbm.com or 949.623.7258

Marianne Martin

Marianne Martin has nearly fifteen years of experience advising clients on a variety of commercial, financing, bankruptcy, restructuring and M&A matters, with a particular niche dealing with distressed and/or turnaround situations. Her clients frequently include private equity and hedge funds, independent sponsors, family offices, public and private corporations, financial institutions and banks, healthcare-related companies, municipalities and venture capital funds. She has represented clients in various capacities, including as borrowers/debtors, lenders, acquirers, and agents/trustees in negotiating and documenting complex commercial transactions, out-of-court restructuring transactions and advising on purchasing considerations in secondary market debt transactions. Contact Marianne at MMartin@jmbm.com or 310.201.3531

Trevor Countryman

Trevor Countryman is an associate in the firm's Real Estate Department. He advises clients in all aspects of real estate transactions including property acquisitions and dispositions, financing, leasing, development and construction. Trevor's clients range from large funds to individual developers and opportunistic investors, engaged in deals involving office, retail, multi-family, single-family, mixed-use and hotel properties. Contact Trevor Countryman at 310.201.3546 or TCountryman@jmbm.com.

Vanessa Han

Vanessa Han is an associate in JMBM's Corporate group. Vanessa can be reached at VHan@jmbm.com or 310.785.5383

Vince Farhat

Vince Farhat is Chair of JMBM's White Collar Defense and Investigations practice. Vince has extensive jury trial experience and focuses his practice on representing companies and individuals in criminal and civil investigations and prosecutions by government enforcement agencies, as well as complex federal litigation. He also advises companies in connection with complex and sensitive internal investigations. Prior to joining JMBM, Vince served as an assistant United States attorney in the Major Frauds Section of the U.S. Attorney's Office for the Central District of California. Contact Vince Farhat at 310.785.5382 or VFarhat@jmbm.com.

Sarah G. Hartman

Sarah G. Hartman is a partner in JMBM's Litigation Group and a member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. Sarah is an experienced litigator who advises and represents clients through all aspects of litigation, from inception through trial and appeal. She advises and represents clients in the hospitality industry, including the termination of hotel management agreements and franchise agreements. Sarah also advises and represents clients on women's health technology issues, intellectual property matters, and complex commercial disputes, including breach of fiduciary duty, fraud, breach of contract, unfair competition, products liability, employment litigation, class action defense, false advertising and other complex financial disputes. Contact Sarah Hartman at 949.623.7243 or SGHartman@jmbm.com.

Michael H. Strub, Jr.

Michael H. Strub, Jr. is a partner in JMBM's Litigation Group and a member of JMBM's Global Hospitality Group® -- a team of seasoned professionals who have helped clients around the world with more than 4,700 hospitality properties worth more than $125 billion. He is a highly skilled trial and appellate attorney who has handled high-stakes, complex commercial and business cases for 30 years including disputes arising out of hotel construction, lending, and bankruptcy. In addition, he has represented plaintiffs and defendants in business and commercial disputes in a variety of areas. Contact Michael H. Strub, Jr. at 949.623.7233 or MStrub@jmbm.com.

Ask the Hotel Lawyer™ is a quarterly column that I write for JMBM's Global Hospitality Advisor®. If you have a question you would like to submit to Ask the Hotel Lawyer™ please use the comments box below. While your question may not be of sufficient general interest for the column, I will try to respond to you individually if you leave your contact information below.
Jim Butler.

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