June 14 2010
Seeks to Acquire up to $500 Million in Hotels by Year-end,
Acquires $90 Million Face Value in Hotel First Mortgage Debt
STATE COLLEGE, Pa., June 7, 2010—Officials of Shaner Hotel Group (SHG) today announced plans to acquire between $300 million and $500 million in hotel assets over the near term, possibly as soon as by year-end. The company also announced that its Shaner Mortgage Real Estate Investment Trust (REIT), funded by Shaner and Five Arrows Realty Securities V, L.P., has acquired $90 million face amount of performing first mortgage debt under its previously announced plan to acquire approximately $200 million of debt.
“We have had in place for some time a plan to acquire hotels as the second phase of our expansion strategy to complement our debt acquisition platform,” said Lance Shaner, chairman and CEO of SHG. “The availability of assets coming to market is finally beginning to expand, which has allowed us to put our plan in action. Capital has not been the problem in hotel real estate transactions, it has been available product.”
Shaner said his company’s acquisition profile targets multi-unit and single-asset acquisitions from owners and lenders and that he expects to sign a letter of intent (contract, etc.?) on its first transaction in as soon as the next 30 to 45 days. “Because we historically are longer-term holders of hotel real estate, we are targeting properties under 10 years old in cities east of the Mississippi. We seek upscale select-service and full-service properties in robust markets with $70 or higher revenue per available room (RevPAR), in cities with multiple, stable demand generators, such as college towns, state capitals or a sizeable defense industry base.”
SHG will operate all of the hotels it acquires. “As an owner/operator, we believe we are better able to gauge a hotel’s potential because we see it from both an investment and operating entity perspective,” he said. “Because we have all the key disciplines in-house, from marketing to construction supervision, we believe we can operate more efficiently and effectively than our competitive set. As a result, we can respond more quickly in the due diligence process, evaluate the opportunities for repositioning and operating improvement and be at full speed the day we take over a property.”
