News
Re-Inventing the REIT
December 21, 2010
| Selling non-strategic assets and acquiring upscale properties has been the plan for FelCor Lodging Trust REIT since 2006. It's now begun a second phase of disposition: 14 of its 83 hotels were listed this fall, and last week, the REIT sold one in Virginia for $84.5M. | |
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| After the '06 shift to a long-term strategy, FelCor also began the shift from quantity to quality, says EVP Mike DeNicola (center), with CBRE Hotels EVP Charlie Quinn and FelCor VP Jan Kuehnemann in the FelCor offices. Mike says the national hospitality REIT started out all-suite but moved into full-service hotels and is now working to narrow its focus from growth and expansion to owning upscale properties in selective urban areas. | |
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| In one of the largest hospitality acquisitions of the year nationwide at $98.5M, FelCor's The Fairmont Copley Plaza acquisition comes with plans for $20M in capital improvement s including refreshing guestrooms and public areas and a fitness center. Charlie, who repped the hotel's owner, Fairmont Hotels & Resorts, says the hotel was first brought to the market in January 2008 just as CRE was crashing. Mike began talks with Charlie about the property at the start of 2010 as the REIT was ready to go forward with acquisitions. This purchase was the first for FelCor since 2007, he adds. | |
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| We followed Mike and Jan toward the smell of sausage and found them in the FelCor kitchen, where breakfast for the staff had been served that morning. Mike says the company's leadership prepares a meal for the staff at least once a month: "This is more like a family than a workplace." (Though we can't recall the last time our family prepared breakfast for us.) Back to hotels, last Wednesday, FelCor sold the 443-room Sheraton Premiere Hotel at Tysons Corner in Vienna, Va., to JBG for $84.5M in cash. The property was owned by a JV of FelCor and Starwood Hotels. FelCor received $42.25M in gross proceeds, and there was no debt associated with the hotel. The sale price was $191k per key, and Molinaro Koger repped FelCor. |
