Hurricane Irma: South Florida hotel investors face potential damage
Mandatory evacuations in the Florida Keys will result in immediate losses for hotels
Along with residents and small businesses, major lodging real estate investment trusts could also be slammed by Hurricane Irma this weekend if the storm makes landfall in South Florida or passes close by.
Hyatt Hotels Corp. has the greatest exposure to storm damage. About 7 percent of its rooms are in threatened areas, The Wall Street Journal reported.
Wells Fargo Securities analysts told the Journal that lodging REITs including Ashford Hospitality Prime Inc., Hersha Hospitality Trust, DiamondRock Hospitality Co., RLJ Lodging Trust, and Southerly Hotels have around 10 percent of their rooms in the areas that the currently offshore Category 5 storm could hit.
Officials in the Florida Keys have already issued mandatory evacuations to begin Wednesday that will result in monetary losses from canceled trips, The Wall Street Journal reported.
BTIG Equity Research analysts also noted that LaSalle Property Group, owner of two Key West hotel properties with 354 rooms, could face a drop in revenue due to evacuations. However, Gulf Coast Property managers told the Journal that while they expect tourists to make hotel cancellations, they also expect residents seeking shelter to check in to the vacant rooms.
As South Florida braces for Hurricane Irma’s 125 to 185 mile-per-hour winds, 25 construction cranes in Brickell and Downtown Miami pose concerns for residents planning to weather the storm. [WSJ] — Grace Guarnieri