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
Mangels Butler & Mitchell LLP (JMBM), one of California's foremost
full-service law firms, today announced that its Global Hospitality
facilitated the sale of the Sheraton Universal Hotel to Shenzhen New
Group Co. JMBM represented the receiver and structured the sale so that
20-story, 451 room hotel could be conveyed while the hotel was in
sellers and lenders face significant challenges when a hotel is in
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
lender having to foreclose on the property." The result is similar to a
including providing the buyer with clean, insurable title, but without
lender taking on the risks of owning the asset, he explained.
its proximity to Universal Studios, Shenzhen's strategic purchase could
one of the best purchases in this economic cycle," said Jim Butler,
Chairman of JMBM's Global Hospitality Group®. Butler noted that the
sector's recovery is leading other commercial real estate sectors, and
numerous investment groups and private equity firms are circling
"This new wave of investment includes significant participation by
investors who believe U.S. hotels are 'really cheap' due to current
rates," he said.
pointed out that, in addition to the favorable exchange rate, Asian
are looking to capitalize on the growing number of Asian tourists
U.S. by providing them with U.S. hotels that are culturally in tune
needs. Chinese tourists now rank 4th and South Korean visitors 5th,
foreign citizens visiting Los Angeles, according to the Los
values rose 10% nationwide in 2010, and projections show the increase
twice that in 2011," he said, noting that many investors see 2011 as
window of opportunity for hotel investment. "It is also one of the
the lender was comfortable with the Sheraton Universal sale," he added.
acquisitions are complex in the best of times," said Butler, who has
involved in hotel purchases and sales for more than two decades. In
market, many hotel assets are troubled, so the legal and business
compounded, he said.
sale of passive real estate by a receiver is fairly straightforward,"
Maisnik. "But the sale, by a receiver, of a hotel -- which includes
real estate and a complex operating business -- is very unusual. It's a
cutting-edge legal process, and not allowed in all states."
sellers and lenders need to approach these transactions with their eyes
open, as the downside is significant," said Butler. "But experienced
lawyers and advisors are able to structure these deals so that
value is added to the hotel asset, which provides benefits to all
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
union contracts, and a host of other problems. Together, we turned it
including recovering on the debt -- and the hotel is now poised for
Global Hospitality Group® structured the first-ever hotel sale by a
the early 1990s, and has represented receivers in six hotel sales in
RIM Hospitality: Mark Burden
Jones Lang LaSalle: John Strauss
Attorney for Special Servicer: Diane Stanfield
is Jim Butler, author of www.HotelLawBlog.com
and hotel lawyer, signing off. We've done more than $60 billion of
transactions and have developed innovative solutions to unlock value
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.
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