Quite a few hotels have changed hands in recent weeks as hotels are put up for sale.A notable hotel was the Sheraton Universal Hotel which is now officially on the market after facing financial troubles. The 20-floor Californian hotel tower was bought by real-estate developer and landlord Lowe Enterprises in 2007 for US$122m. A further US$25m was then spent on the hotel in order to renovate the guest rooms and public spaces.
Unfortunately the recession meant that the hotel’s price fell and in February Sheraton Universal Hotel was only worth an estimated US$75m. Not only this, but the falling occupancy inflated the hotel’s costs further.
Jones Lang LaSalle Hotels, who is marketing the property declined to reveal how much the 41-year-old hotel is on the market for, but it is estimated that it’s to be sold for around US$90m if a buyer can be found.
The Sheraton Universal Hotel is not the only hotel on the market. The Hampton Inn and Suites in Miami West has been sold to Apple Real Estate Investment Trust for an undisclosed sum. The property was previously owned by GFII DVI Cardel Doral and is a hotel that featured 121 rooms as well as an outdoor pool, fitness room and business centre.
Another hotel to sell for an undisclosed sum was the Limelight lodge in Aspen, Canada, which sold to Aspen Skiing Company.
Carmen Allan
Editor’s Note
A number of so-called ‘vulture funds’ are hovering around the industry seeking to buy properties at a discount to the market price. Many hotels are not solvent but are being kept in business by banks that are reluctant to increase the bad debts they have on their books.
However, as banks become profitable this reluctance will start to disappear and even though we are entering the recovery phase, expect to see increasing numbers of properties offered on the market. This is not just an US phenomenon, and is particularly marked in Ireland where there are estimated to be 40 per cent of hotels that cannot trade profitably.
Patrick Goff
Editor
