tr005184
Matrose
Joined: 01 February 2021
Location: United States
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Posts: 2
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| Posted: 22 March 2021 at 09:12 | IP Logged
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Dreamscape Cos. is the latest investment firm to announce
plans to direct cash into the struggling hotel industry,
particularly properties catering to business travelers.
It isn’t clear when those deals will — if ever —
transpire.
The New York City-based investor, which bought the Rio
All-Suite Hotel & Casino in Las Vegas in 2019 for $516
million, has more than $1 billion on hand to buy hotels.
hotels-list-1363"">thiruvananthapuram hotel
While it is expected to look at all opportunities,
Dreamscape is notably exploring properties in the
struggling business-transient and convention sectors —
two areas with a less certain recovery timeline.
“We are not married to simply that vertical, but the
recovery within that vertical may take more time, and as
such that’s where entry pricing may end up being more
compelling,” Dreamscape CEO Eric Birnbaum told Skift via
email. “That being said, it is hard to make broad stroke
claims as every asset and deal has its own narrative.”
Dreamscape’s first acquisition is the Warwick Hotel in
Philadelphia, Bloomberg first reported. There is plenty
of reason to think more hotel investment opportunities
will come from larger cities than resort locations. Hotel
occupancy rates in more business-oriented markets lag
leisure destinations: the occupancy rate in Boston last
week averaged nearly 32 percent compared to nearly 67
percent in Miami.
But there is a growing sentiment in the hotel industry
that further hotel deals could be hard to come by.
“There may not be complete carnage; but there will be
opportunities,” Birnbaum told Skift via email. “You
have to, like always, be nimble, judicious and pick your
spots.”
Hotels remain a leading source of delinquencies for
commercial mortgage-backed securities, a group of
mortgages pooled as one that hotel developers use to
build new projects.
But that delinquency rate is falling, dropping from 19
percent in January to 16 percent last month, according to
real estate data provider Trepp. It was a nearly 24
percent delinquency rate last summer.
There is further optimism surrounding federal economic
stimulus and bank forbearance when it comes to struggling
operators. Most banks don’t want to take on ownership of
a struggling hotel.
“I think a lot of the lenders learned some very good
lessons in the last downturn,” Clifford Risman, a
Dallas-based real estate attorney at Foley & Lardner,
told Skift last year. “If the lender could foreclose and
change a flag or management company and operate better or
differently, yeah they would. But this is a problem that
changing a flag and management company isn’t going to
fix.”
The hotel industry received further optimism this week
following U.S. President Joe Biden’s claim the country
could be back to some degree of normalcy by July 4.
Hotels in China are now only about 10 percent off 2019
revenue levels after stumbling at the beginning of the
year due to flare-ups of the virus in northern parts of
the country.
That isn’t keeping investors away from pursuing pandemic
opportunities. The $24.5 billion in hotel and
hospitality-targeted capital raised last year matched
2016 levels, according to a real estate firm JLL.
Bainbridge DXS, CGI Merchant Group, Electra America
Hospitality Group, and Torrey Pines Hotel Group are some
of the leading investment groups raising money to buy
hotel assets during the pandemic.
They, along with investors like Dreamscape, may still
find opportunities in the hotel sector.
“There will be some distressed deals out there,”
Richard Clarke, a senior analyst covering global leisure
and hotels at Bernstein, told Skift last month. “After
2009 [and the financial crisis] there was four years of
churn of hotels closing and changing hands. We’re only
12 months in. It’s too early to say we’re in a state
where there aren’t opportunities.”
Edited by tr005184 on 22 March 2021 at 09:15
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