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Hotel Developers, Investors Betting Big on Store, Lifestyle Brands

Like Beer Conglomerates Adding Craft Brewers to Stay Hip (and Relevant), More ‘Soft-Brand’ Store Players Becoming Growth Drivers for Mega-Hotel Companies

Rockbridge’s Art Deco-style Noelle hotel brand is focused on young, stylish customers. Credit: Rockbridge

As competitors from Airbnb and other online hospitality services heightens, the world’s biggest hotel brand names have signed up with a growing variety of store and way of life hotel experts in attempting to grow bigger by going small.

Openly traded business like Choice Hotels International (NYSE: CHH), Marriott International Inc.(NYSE : MAR)and Hyatt Hotels Corp. (NYSE: H) in addition to financial investment management companies such as Rockbridge and smaller sized operators such as Denihan Hospitality, are significantly opening boutique-style mini-chains focused on particular way of life travelers, with an emphasis on tech amenities, off-beat, non ‘cookie-cutter’ homes and hip d├ęcor.

Denihan, Trammell Crow Co. and KochSmith Capital on Tuesday revealed strategies to bring the Denihan’s 4th James Hotel brand property to Armature Functions, a mixed-use advancement beginning later this year in Washington, D.C.’s NoMa community.

Trammell Crow and KochSmith will establish the 204-room hotel and Denihan has actually been hired to manage the high-end store home. The James Washington D.C. is scheduled to open in the winter season of 2020, together with the remainder of the 780,000-square-foot Armature Works development, that includes a 465-unit apartment building, a 170-unit condominium building, outside public spaces and 42,000 square feet of street-level retail.

Vera Manoukian, president and chief running officer of Denihan Hospitality, called the collaboration with such deep-pocketed backers “a perfect example of how we mean to utilize the power of our distinct brand names and operating platform to drive sustained development.”

Another current example is Rockbridge’s Noelle, a 224-room, 13-story Art Deco-style hotel at 4th Ave. and Church St. in a section of downtown Nashville becoming known as “Store Row” for the cluster of trendy, experience-focused hotel and retail organisations accommodating the flourishing city’s growing diverse population and company base.

Hospitality REITs such as Choice Hotels were early adopters of shop and other soft-brand concepts. Choice opened 45 of its Ascend Collection-branded upscale hotels in 2017 alone.

“Ascend continues to be a terrific value proposition for developers. We’re seeing a lot of new construction,” stated Dominic Dragisich, Option chief monetary officer, in a current call with investors.

Marriott has opened 27 Tribute-brand residential or commercial properties all over the world totaling 6,224 rooms, with 16 totaling 2,148 rooms in the advancement pipeline, including a 127-room property announced today in downtown St. Paul, MN. Building in the Park Square Structure will begin this summertime.

Hyatt has ramped up construction of its Hyatt Centric store brand name, including a 127-room home prepared for opening in 2019 near the Sacramento Kings practice facility in downtown Sacramento.

The introduction of brand-new technologies has opened the shop sector to hotels and practically all other industries, said Frances Kiradjian, CEO of the Shop & & Lifestyle Lodging Association.

“We have become an inclusive community. Gone are the days when store just indicated intimate,” Kiradjian said. “Candy shops, coffee homes as well as fitness studios have actually used the potential of shop. The truth is that new technologies and an increasingly connected community allow entrepreneur to assist in wholesome experiences to any group, no matter the facility or product being vended.”

With so many new brands out there, owners or all types are working overtime to distinguish their offerings from the abundance of launches by competing chains.

“We’re looking forward to see if we’re being impacted by some of these other soft brand name launches, but we’re just not seeing it in the development neighborhood at this moment,” said Dragisich of Choice Hotels.

Whatever the brand-new pattern towards genuine accommodations experiences may end up being called, it is here to stay, kept in mind Court Williams, head of executive search operations in New york city City for hospitality research company HVS.

With millennial journeys demanding hyper-local experiences particular to a location, numerous lifestyle hotel brands have included restaurants, bars as well as lobbies targeting local citizens as much as tourists. The have to feel safe in this mix of locals and journeys offers acknowledged brand names the edge, Williams added.

“Lodging experiences backed by the track record of recognized hotel brands provide a greater level of self-confidence for travelers, which is one factor the increase of shared lodgings [Airbnb and other lodging leased by personal property owners] has not truly affected the hotel industry,” Williams stated.

Managing this mix of simpleness and immersive experiences will be challenging for brands, Williams acknowledged.

“However with lifestyle hotels currently comfy with being ‘different’ from conventional brands, this sector is perfectly poised to end up being ground no for future travel,” he included.

Betting on Big Houston Return, CPPIB Buying Office REIT Parkway for $1.2 Billion

Houston workplace property REIT Parkway Inc.(NYSE: PKY), the spin-off financial investment trust formed to take control of the Houston holdings of Parkway Properties and Cousins Characteristics following their 2016 merger, is being purchased by the Canada Pension Plan Financial investment Board (CPPIB) for $1.2 billion, ($23.05 per share).

The offer, which is not subject to a financing condition, consists of $19.05 per share plus a $4 unique dividend to be paid prior to closing, representing a premium of roughly 14.3% when compared with Parkway’s 30-day volume weighted average cost ended June 29, 2017.

The REIT’s stock leapt 12% this morning on the news.

Parkway’s board of directors all approved the contract. TPG Capital and its affiliates, which collectively own around 9.8% of the impressive common stock of Parkway, have actually consented to enact favor of the transaction.

“Parkway fits well with CPPIB’s long-term property strategy to hold stable, premium properties in big U.S. markets,” said Hilary Spann, handling director, head of U.S. real estate financial investments, CPPIB. “Through this financial investment, CPPIB gains additional scale in Houston.”

Earlier this year, CPPIB showed it was something of a contrarian financier whern it obtained a major stake in an 11-building Houston workplace portfolio including Greenway Plaza and Phoenix Tower from Parkway Inc. for $141 million. The deal pegged the full value of that 4.9 million-square-foot portfolio at $1.045 billion, an implied $210 per square foot.

CPPIB joined with TH Property and Silverpeak Real Estate Partners in the joint venture with Parkway to own the Greenway portfolio. CPPIB took a 24.5% interest, and TH Realty and Silverpeak own a combined 24.5%, with Parkway maintaining a 51% interest.

Parkway owns the biggest workplace portfolio in Houston, amounting to 8.7 million square feet throughout 19 properties situated in the Greenway, Galleria and Westchase submarkets of Houston. The residential or commercial properties were 87.6% rented as of March 31, 2017.

“CPPIB shares our view of the long-lasting resiliency of the Houston market,” said James R. Heistand, Parkway’s CEO. “Our company believe there are still some near-term headwinds in the office sector for Houston, but the implied property assessment of this transaction reveals CPPIB’s appreciation for the top quality portfolio we have actually assembled and the near-term stability it provides throughout the present slump in the market.”

The offer is anticipated to close in the 4th quarter of 2017, subject to customary closing conditions, including approval by Parkway’s investors.

HFF Securities LP acted as financial consultant to Parkway, and Hogan Lovells served as Parkway’s legal counsel.

Developers Betting Child Boomer Structure Boom has actually Shown up for Seniors Housing

As New age of Construction Crests, Developers Wager That Boomers Also Will certainly Eschew Own a home For Benefit of Rental Senior Housing

All the interest given to millennials and their penchant for bicycle-and-rail riding city apartment or condo houses in current quarters has actually somewhat obscured the basic group fact that the largest mate for U.S. rental housing need is the tens of thousands of child boomers turning retirement age and becoming seniors per day.

Senior citizens real estate and care financiers and designers have actually reacted with the largest pipeline of brand-new senior real estate construction in 6 years, according to the Annapolis, MD-based National Investment Center for Elder Housing and Care (NIC), which tracks tenancy, absorption and supply of U.S. elders housing and care facilities.

The NIC’s recent report that brand-new seniors real estate inventory exceeded supply for the second straight quarter at midyear 2015 has actually when again caused oversupply issues to ripple throughout the industry. The sped up supply triggered the tenancy rate for senior citizens housing buildings to tick down 20 basis points to 89.9 % in second-quarter 2015.

“The slip in occupancy reveals that the pace of demand did not match brand-new supply,” states NIC Chief Financial expert Beth Mace, though the absorption rate of brand-new supply differs by market.

Some markets such as San Antonio, TX, and Riverside, CA, in the Inland Empire are having a more difficult time soaking up new item, while others such as Phoenix and Minneapolis continue to see tenancy gains in spite of robust shipments, Mace stated.

The annual development rate of new supply accelerated to 1.9 % of total senior housing stock in the second quarter, up from 1.7 % during the previous three months, while jobs now under construction, determined as a share of existing stock, were down 0.2 percentage points from the first quarter to 4.2 %.

The more than 3,600 devices provided in the 2nd quarter was the greatest quarterly number of senior citizens housing devices coming on line of the previous six years– considering that mid-2009, near the end of the sector’s last considerable construction cycle, says Chuck Harry, NIC director of research study and analytics. And supply isn’t anticipated to relieve whenever quickly.

“Provided the sustained rates of stock development expected throughout the coming year, absorption’s present speed will certainly have to pick up in order for the marketplace to experience any substantial upward pressure on the occupancy rate,” Harry said.The Case for Long-Term Demand

In spite of the stark supply numbers, it is necessary not to ignore the infant boom generation as a long-term source of multifamily housing need, kept in mind Ethan Vaisman, property economic expert with CoStar Profile Technique.

Between now and the end of 2019, the population age 65 years and older will grow by over 8 million, while the 20- to 34-year-old mate will only increase by about 1.5 million, Vaisman said during the current CoStar Midyear 2015 Home Market Testimonial and Forecast.

“Boomers are most likely candidates to get in the tenant pool as they become empty nesters and downsize their living plans. Leasing in general is more practical and needs less duty than homeownership as people end up being senior,” Vaisman stated.

Older homes are an appealing source of rental demand also due to the fact that their higher wealth helps insulate them the effects of continued lease gratitude, considering that within the leading quintile of net worth, homes headed by individuals ages 55 and older are 10 times wealthier typically than those age 55 and more youthful, Vaisman added.

“Basically, child boomers are anticipated to have a a lot more considerable role in the renter population moving on,” he stated

Multifamily housing contractors in all sectors are supplying an abundance of brand-new supply to please that demand. Multifamily starts and permits are both well above historical levels nationally and remain to trend up.

Total multifamily starts have actually averaged about 242,000 units a year considering that 1990, however in 2014, designers started more than 340,000 units. Another 180,000 starts in the first half of 2015 across all markets and sectors puts the marketplace on speed to exceed in 2013’s total.

‘Heated’ Rates Produces Opportunities for Disruptors

Acquisitions and development activity by the large publicly traded REITs in the senior housing sector offers a window into the complex supply/demand metrics.

For example, New Senior Investment Group (NYSE: SNR), which went public in March 2015 explaining itself as the first and just pure-play seniors housing REIT, isn’t really yet in the development business. Nevertheless, SNR is tactically building its portfolio of independent living properties, a sub-sector where new supply hasn’t entered the market as quickly as other kinds of elders real estate.

New Senior Investment on Tuesday announced the completion of its $640 million acquisition of 28 private-pay independent living buildings totaling 3,298 systems from affiliates of Vacation Retirement. Freddie Mac supplied an aggregate very first mortgage for $465 million originated by Walker & & Dunlop, Inc., which has aimed to grow its elders real estate financing business dramatically this year, finishing $1.2 billion in funding to this day, according to Chairman and CEO Willy Walker.

The deal brings New York-based SNR’s independent care portfolio to 105 properties, in addition to 42 assisted-living/memory care facilities and five continuing care retirement home, for a total of 152 properties in 37 states.

New supply under way in the wider senior housing area totals over 4 % of existing stock, nevertheless, two-thirds of SNR’s portfolio is now independent living assets where the supply pipeline is less than 3 % of present stock, noted CEO Susan Givens.

“Clearly, there’s new competition being available in,” states Givens. “It is market by market, but we’ve seen the trends, with new development coming on line over the last several quarters.”

With SNR’s high level of independent living exposure, “we wouldn’t say that we’re completely insulated from the effects of new advancement, but we’re more insulated,” Givens stated.

New Elder Investment hopes to use its ample supply of money to profit from prospective market disruption coming from the added in seniors real estate asset rates that has helped trigger the most recent round of brand-new development.

New Senior citizen Financial investment has more than $100 million in liquidity at its disposal, not a surprise considering it’s handled by an affiliate of global private equity Fortress Investment Group LLC, which has $72 billion in possessions under management.

SNR is likewise thinking about selectively pruning its independent living profile in particular markets, preparing to make use of a few of the prospective profits to recycle capital or modestly minimize company take advantage of.

“It seems like a pretty heated market today. And our view is that that produces chances,” Givens said.

Hacker attacks betting sites, demands Bitcoin ransom


Wayne Parry/ AP

This Jan. 31, 2014, photo reveals a video game of Texas Hold ‘Em under way on a computer system screen in Atlantic City.

Tuesday, July 7, 2015|8:22 p.m.

ATLANTIC CITY– A hacker closed down four New Jersey Web betting sites for half an hour recently and threatened more cyberattacks over the holiday weekend unless a ransom was paid using the online currency Bitcoin, authorities said Tuesday.

David Rebuck, director of the New Jersey Pc gaming Enforcement Division, said Thursday’s attack was a so-called distributed rejection of service attack, where sites were flooded with info and demands for gain access to that rendered them inoperative.

“The attack was followed by the threat of a more effective and sustained attack to be started 24 Hr later on unless a Bitcoin ransom was paid,” Rebuck stated. “This follow-up attack had the prospective to not just adversely influence the targeted gambling establishments, however likewise all business in Atlantic City” that share the same Internet service provider.

No ransom was paid. Rebuck said due to a response by law enforcement and casino staff, “the risk was alleviated with no considerable interruption to service. All involved remain on heightened alert but are relieved that the holiday weekend has actually passed without event. “

Rebuck did not identify the sites that were affected nor the size of the ransom looked for. However he stated many regional and state law enforcement agencies are investigating.

Bitcoin is a virtual currency that, in addition to its genuine uses, likewise has shown popular with online wrongdoers.

No player cash was stolen and no personal info was jeopardized in the occurrence.

New Jersey began Internet betting in November 2013, and is among three states in the country that permit it, together with Nevada and Delaware.

It left to a slower than anticipated beginning right here but has shown indications of growth in current months. New Jersey casinos won $122 million from Web customers in 2014, its first full year of operation.

Sluggish start, steady improvement for U.S. Internet betting


Wayne Parry/ AP

This Jan. 31, 2014, image shows a game of Web Texas Hold-Em being used a computer system screen in Atlantic City N.J.

Published Wednesday, May 27, 2015|3:25 p.m.

Updated 5 minutes ago

ATLANTIC CITY– Web gaming is off to a slow start in the United States, with banks reluctant to manage credit card payments for online bets and some politicians and casino moguls pressing to ban it, however there continues to be prospective for terrific development, participants in a major betting conference concurred Wednesday.

Despite the nascent fitness industry’s lots of difficulties, including unlawful offshore sites that casinos admit are easier to make use of, steady enhancements are occurring, they stated.

3 states presently provide Web gaming: New Jersey, Delaware and Nevada. Other states are thinking about doing this, including California and Pennsylvania.

New Jersey took in $122 million from Web betting last year; Delaware took in almost $2.1 million and Nevada successfuled $8.1 million at poker, the only video game it offers online, from February to November of in 2014, when it stopped reporting online income results.

In March, Morgan Stanley cut its estimate of the prospective U.S. Web wagering market by almost half. The firm now estimates the nationwide online betting market at $2.7 billion by 2020, below a preliminary quote of $5 billion.

Speaking at the East Coast Gaming Congress in Atlantic City, casino operators, payment processors and legislators agreed the legalized online betting industry is still being held back by the rejection of some banks to manage Web wagering deals, and the relatively restricted liquidity in video games of online poker that would be improved by having more states join together to increase reward swimming pools.

“The greatest difficulty of Web betting in the united state is that this is a market still took a look at as having been substantiated of sin,” stated Gil White, whose law practice represents 888 Holdings. “The brand-new world of Web betting is clearly controlled and regulatable.”

When online gambling began in 2013, numerous consumers had a tough time making deposits to fund their accounts since banks refused to authorize the transactions. That has enhanced somewhat with new transaction codes adopted by Visa last month to directly recognize Internet gambling deals from state-regulated, approved sites. That has actually raised Visa approval rates for Internet gaming from the 18 to 22 percent when it initially began to about HALF now, said Joe Pappano, senior vice president of Vantiv Gaming Solutions, which manages electronic transfers for New Jersey online wagering websites.

Thomas Winter season, vice president of online gambling for the Golden Nugget Atlantic City, also said his casino is seeing half of all efforts to fund Internet betting accounts utilizing Visa cards accepted.

“It’s enhancing, but it will require time,” he stated.

Raymond Lesniak, a New Jersey state senator who sponsored his state’s Internet betting law, was blunt about the most significant challenge dealing with online gaming.

“The most significant issue is Sheldon Adelson,” he said of the Las Vegas Sands chairman who has pledged to spend as much as necessary to prohibit Internet gambling in the united state Adelson states he fears for exploiting “vulnerable individuals” and stresses over children being able to gain access to wagering websites.

“When a billionaire states he’ll spend whatever it costs to stop Internet gambling, that scares the bejeezus from legislators,” Lesniak said.

Proposed legislation to ban Web gaming is being considered by Congress however has actually not yet been brought to a vote.

David Rebuck, director of New Jersey’s Division for Gaming Enforcement, stated the sixty-four-thousand-dollar questions of avoiding unlawful activity and protecting consumers have currently been mastered, which need to encourage other states to approve Web gaming as well. He likewise stated sports betting, if it is legalized nationwide, will certainly happen mainly over the Web. New Jersey is waging a court fight to overturn a ban on sports betting in all but 4 states.

Rebuck also said state lottos might be the next wave of growth for Internet betting nationwide.