Browse Tag: hotel

AirBnb: Hotel Execs Say Bring It On

Chicago Hilton Hotel 720 S Michigan Ave Chicag...
Chicago Hilton

The disruptive force of the sharing economy is undeniable. As noted by tech cheerleader Tom Goodwin, the world’s largest taxi company (Uber) owns no vehicles, the most popular media company (Facebook) makes no content, and $25B lodging provider Airbnb owns no real estate, despite its operations adding up to giant impacts on apartment rents in its biggest markets.  There is a chance that large apartment landlords will bring increasing levels of apartment inventory onto a collision course with hotels, at least in the top cities.

But measuring the impact Airbnb has on national hotel business is tougher – and the executive leadership of national hospitality operators doesn’t seem too worried about it. In Lydia DePillis’s piece in the Washington Post, collecting thoughts from hotel CEOs on conference calls, quotes from hotel execs were generally dismissive, noting that the amenities and service such as their industry is known for providing can’t spring from a vacuum:

Trade Group Highlights Multifamily Landlords

Hotel industry trade group AHLA released a white paper that claimed 40% of Airbnb’s revenue was from persons operating multiple units, prompting a pushback from the technology company and a bit of controversy, none of which has to date affected the CEOs outlook on Airbnb as a national-level threat to their hospitality expertise. Will the boardrooms remain confident in their business model, or will they get drawn into the technology-driven disruption as many industries have before them?  Time will tell.

(Photo Credit: Wikipedia)

Palmer House, Thor Equities Snag Refi

The Palmer House Hilton

One of Chicago’s most storied hotel properties has carried on its legacy – by borrowing again.

The Palmer House Hilton, located at State and Monroe in downtown Chicago first opened in 1871 only to burn down two weeks later in the Great Chicago Fire. Builder Potter Palmer immediately secured a loan to rebuild – $1.7 million in what was considered at the time to be the largest individual loan ever.  It was built again.

This week, 143 years later, the venerable property went again to the financing well, albeit in somewhat greater volume.  In a refinancing deal announced this week, the property traded in its $365 million debt for a lower- and floating-rate $420 million debt as REJournals.com reports:

The deal brought together Thor Equity Partners, a bond issue / CMBS loan by Morgan Stanley (five years floating rate) and Jones Lang Lasalle who represented the equity firm.

Bust: One Third Of Atlantic City’s Gaming Space Lost In 2014

English: Revel in Atlantic City

Capping a wave of casino closures on the Atlantic City boardwalk is Revel, the $2.4 billion, 47-story hotel tower that debuted in April 2012. The September shutdown of the starkly designed gambling palace hits the New Jersey economy hard, contributing to closures that take away about one third of AC’s gaming space.

What changed to turn AC’s multi-decade run as a gaming mecca into a parade of glittering vacancies?  Some point to Pennsylvania, whose recent expansions to gaming laws are keeping its players in its own state to play at standalone casinos such as Mount Airy, Sands, Rivers and SugarHouse.

Others suggest that the younger gaming customer tends to be a poker player, and Revel does not offer poker. As the NYT writes:

Internet gambling, which became legal in New Jersey last year, so far has not been a significant threat to the casinos. After initially forecasting that online betting could increase industry revenue by $1.2 billion in the first year, state officials sharply revised down forecasts for both revenue and expected tax receipts, which were scaled back to $34 million from $180 million.

“It hasn’t come close to what their projections were,” said Anthony S. Graziano Sr., executive director in the Coastal New Jersey office of Integra Realty Resources, a national real estate valuation firm.

Competition from out of state, especially in Pennsylvania, has been the main threat in Atlantic City, overshadowing any issues from the recession or Hurricane Sandy in 2012. Customers in eastern Pennsylvania now have a choice of gambling halls in Philadelphia, Bethlehem, Chester or Valley Forge, removing the need to drive an hour or more out of state.

 

Commercial Real Estate News Roundup for August 11, 2014

Pretending the property business is easy, St. Louis and its hot industrial market, retail lagging the recovery (but not in Miami)  and Macy’s goes shopping for commercial real estate talent – it’s all here in the Commercial Real Estate News Roundup for August 11, 2014.

General

Office

Industrial

Retail

Multifamily

Hotel

Land