Private equity decides it’s time to cash in on hotels

Sector's real estate values have almost doubled since 2009 low
September 17, 2013 04:00PM

From left: Blackstone’s Stephen Schwarzman and Starwood’s Barry Sternlicht

From the New York site: Private equity firms such as Blackstone Group have deemed the time ripe for initial public offerings of their hotel portfolios. The IPOs come at a time when resurgent demand for hotel rooms is sending stock prices to record highs, and hotel real estate values have almost doubled since 2009’s low, according to research from Green Street Advisors. The surge has led these groups to the conclusion that now’s the time to cash in, Bloomberg News reported.

“The capital markets have been quite strong and we’ve executed our business plans sooner than anticipated.” Keith Gelb, a managing director at Boston-based Rockpoint Group, told Bloomberg News.

Institutional investors made sales totaling $3.44 billion in the first half of 2013, compared to $1.68 billion in the same period last year, according to data from Real Capital Analytics seen by Bloomberg News. Purchases also rose to $3.43 billion, but the year-over-year growth rate was only 21 percent.

Earlier this week, Hilton, which is the world’s largest hotel chain, filed an IPO to raise up to $1.25 billion. New York-based Blackstone, which controls the chain, also filed for an IPO of Extended Stay. [Bloomberg News]Hiten Samtani