Peter Fine

From the February issue: No one could blame Peter Fine if he expected the past year to be easy
– even amid the market turmoil. Widely regarded as one of the city’s
top affordable housing developers, Fine started last year as the
darling of the entertainment world, as the unlikely coproducer of a
Tony Award-winning musical.
With close ties to President Obama’s new urban development guru, he was also more politically connected than ever. However, while his Broadway show, “In the Heights,” has enjoyed
continued success, Fine’s political connections and real estate career
have taken a beating over the past year.  [more]

Ty Warner, the Beanie Babies billionaire who owns the Four Seasons Hotel New York, is reportedly in danger of defaulting on the 368-room luxury property and is in negotiations with investors to sell it. Warner missed a payment on $185.6 million in mortgage debt on the hotel Jan. 9, sources told Crain’s. The Four Seasons, where room rates start at $1,000 per night, is being used as collateral on a larger debt package that includes three other hotels. The downturn in business and international travel has brought occupancy rates at the hotel down significantly below the 80 percent average of the city at large. Still, the news that Warner might sell near the bottom of the market was surprising to some, particularly because of his personal wealth. “You’d think he could ride through this downturn,” said Sean Hennessy, chief executive of Lodging Investment Advisors. [Crain’s]

With fewer hotel rooms under construction, hotel developers hope the reduction in new rooms will help to revive the hospitality industry.

The October 2009 STR/TWR/Dodge Construction Pipeline Report noted that the total active U.S. hotel development pipeline includes 4,089 projects comprising 435,265 rooms.

This represents a 32.7 percent decrease in the number of rooms in the total active pipeline — which includes projects in the construction, final planning and planning stages, but not in the pre planning stage — compared to October 2008.

“The number of rooms in construction fell 41.2 percent from the same time last year,” said Duane Vinson, vice president at STR. A number of planned hotels have ground to a halt in Manhattan including the Lower East Side’s 180 Ludlow Street.
[more]

Standard & Poor’s may downgrade the commercial real estate debt backed by four hotels, including the Four Seasons in New York. The TY Warner Hotels & Resorts properties recorded a 46 percent drop in net cash, according to an S&P note dated Oct. 21, and have since been placed on “credit watch with negative implications.” Their $425 million loan is scheduled to mature in January 2010 and has a one-year extension option, for which it will not qualify before clearing a debt-service-coverage hurdle, S&P said. The decrease in cash flow at the Four Seasons and other luxury hotels could be attributable to an 11 percent drop in occupancy rates for the year ended Dec. 31, 2008, according to S&P. [Bloomberg]

The global recession and the credit crisis are having an effect on new
hotel construction throughout the U.S., especially in New York City.
Total projects under construction in the U.S. have fallen 20.1 percent
since last year, with a corresponding 27.2 percent drop in the number
of rooms, according to the June 2009 STR/TWR/Dodge Construction
Pipeline Report released exclusively to HotelNewsNow.com, a division of Smith Travel Research. [more]