News for the Hospitality Executive |
Sheraton Universal Hotel Sale Facilitated by JMBM's Global Hospitality Group®
By Jim
Butler
and the Global Hospitality Group®,
Author of www.HotelLawBlog.com January 7, 2011 Jeffer
Mangels Butler & Mitchell LLP (JMBM), one of California's foremost
full-service law firms, today announced that its Global Hospitality
Group®
facilitated the sale of the Sheraton Universal Hotel to Shenzhen New
World
Group Co. JMBM represented the receiver and structured the sale so that
the
20-story, 451 room hotel could be conveyed while the hotel was in
receivership. "Buyers,
sellers and lenders face significant challenges when a hotel is in
financial
trouble," said JMBM hotel lawyer, Guy Maisnik, the lead lawyer in the
transaction. "We structured this sale through a receivership, which
enabled all parties to address the real estate and legal issues without
the
lender having to foreclose on the property." The result is similar to a
foreclosure,
including providing the buyer with clean, insurable title, but without
the
lender taking on the risks of owning the asset, he explained. "Given
its proximity to Universal Studios, Shenzhen's strategic purchase could
prove
one of the best purchases in this economic cycle," said Jim Butler,
Chairman of JMBM's Global Hospitality Group®. Butler noted that the
hotel
sector's recovery is leading other commercial real estate sectors, and
that
numerous investment groups and private equity firms are circling
coveted assets.
"This new wave of investment includes significant participation by
foreign
investors who believe U.S. hotels are 'really cheap' due to current
exchange
rates," he said. Butler
pointed out that, in addition to the favorable exchange rate, Asian
investors
are looking to capitalize on the growing number of Asian tourists
visiting the
U.S. by providing them with U.S. hotels that are culturally in tune
with their
needs. Chinese tourists now rank 4th and South Korean visitors 5th,
among all
foreign citizens visiting Los Angeles, according to the Los
Angeles Times. "Hotel
values rose 10% nationwide in 2010, and projections show the increase
could be
twice that in 2011," he said, noting that many investors see 2011 as
the
window of opportunity for hotel investment. "It is also one of the
reasons
the lender was comfortable with the Sheraton Universal sale," he added.
"Hotel
acquisitions are complex in the best of times," said Butler, who has
been
involved in hotel purchases and sales for more than two decades. In
this
market, many hotel assets are troubled, so the legal and business
issues are
compounded, he said. "The
sale of passive real estate by a receiver is fairly straightforward,"
said
Maisnik. "But the sale, by a receiver, of a hotel -- which includes
both
real estate and a complex operating business -- is very unusual. It's a
cutting-edge legal process, and not allowed in all states." "Buyers,
sellers and lenders need to approach these transactions with their eyes
wide
open, as the downside is significant," said Butler. "But experienced
lawyers and advisors are able to structure these deals so that
significant
value is added to the hotel asset, which provides benefits to all
parties." According
to Maisnik, that is the case with the Sheraton Universal acquisition.
"This deal is a real industry success story," he said. "Before
the acquisition, this property had negative EBITDA, major liens, lapsed
labor
union contracts, and a host of other problems. Together, we turned it
around --
including recovering on the debt -- and the hotel is now poised for
growth." JMBM's
Global Hospitality Group® structured the first-ever hotel sale by a
receiver in
the early 1990s, and has represented receivers in six hotel sales in
the last
18 months. RIM Hospitality: Mark Burden Jones Lang LaSalle: John Strauss Attorney for Special Servicer: Diane Stanfield This
is Jim Butler, author of www.HotelLawBlog.com
and hotel lawyer, signing off. We've done more than $60 billion of
hotel
transactions and have developed innovative solutions to unlock value
from
troubled hotel transactions. Who's your hotel lawyer?
Our Perspective. We represent hotel lenders, owners and investors. We have helped our clients find business and legal solutions for more than $60 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at [email protected] or 310.201.3526. Jim Butler is a founding partner of JMBM and Chairman of its Global Hospitality Group®. Jim is one of the top hospitality attorneys in the world. GOOGLE "hotel lawyer" and you will see why. JMBM's troubled asset team has handled more than 1,000 receiverships and many complex insolvency issues. But Jim and his team are more than "just" great hotel lawyers. They are also hospitality consultants and business advisors. For example, they have developed some unique proprietary approaches to unlock value in underwater hotels that can benefit lenders, borrowers and investors. (GOOGLE "JMBM SAVE® program".) Whether it is a troubled investment or new transaction, JMBM's Global Hospitality Group® creates legal and business solutions for hotel owners and lenders. They are deal makers. They can help find the right operator or capital provider. They know who to call and how to reach them. |
Contact:
Jim Butler
|
Also See: | New
York Times: Hotel Sector May Lead Economic Recovery / Jim Butler /
December 2010 |
ADA
Defense Lawyer: California's Certified Access Specialist program --
Does it provide all of the intended ADA protections? / Jim Butler /
December 2010 |
|
How
"Standards" Can Protect Your Hotel Mixed-use Assets . . . / Jim
Butler / November 2010 |
|
Hotel
Lawyer: Checklist for Negotiating Hotel Management Agreements/Hotel
Operating Agreements - The HMA PRO™ Checklist / Jim Butler /
November 2010 |
|
Distress
Continues for Hotels and Commercial Real Estate: New Data Suggests 8
year Downturn, Dismal Prospects and Increased Foreclosures / Jim
Butler / October 2010 |
|
Atlas 2009 Year End Hotel Survey . . . and What it Means / Jim Butler / February 2010 |