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PHOENIX, Ariz. and SEATTLE, Wash.—April 6, 2010—Barcelona
Hotel Group, a financial investment group, and Dow Hotel Company LLC
(DHC), a hotel ownership, investment, and management company, today
announced that they have signed a letter of intent to acquire and
operate hotels. Under terms of the agreement, Dow will become a
strategic alliance member (SAM) and co-invest with affiliates of
Barcelona to acquire first-class, full-service hotels over the next 12
to 18 months.
Barcelona REIT One (BR-1), a private real estate investment trust, or
an affiliate of BR-1, will acquire and own the properties. The
closed-end fund, managed by Barcelona, expects to acquire up to $450
million in hotel assets. BR-1 is the first in a planned series of
Barcelona-administered hotel investment funds. As a SAM, Dow will
invest in BR-1, along with institutional investors. Dow will be
responsible for sourcing acquisition candidates and will operate as a
third-party manager for all properties it presents and that are
acquired. Also as part of the agreement, Murray Dow, president, Dow
Hotel Company, has been named to the Board of Directors of Barcelona
Hotel Group.
A release from the companies says that acquisition candidates will be
properties that can benefit from Dow’s turnaround and repositioning
expertise. Target properties will be capable of operating under the
leading, premium brands in the mid-market through upper upscale
segments. Locations will be primary and secondary U.S. and Canadian
markets.
“We believe that the next several years will create exceptional
opportunities to acquire hotels, reposition them and take advantage of
an economic upswing,” Richard Harkin, president of Barcelona Hotel
Group, said in the release. “The industry is in the worst downturn in
operating results in more than a generation. Hotel values have declined
and hundreds of properties are in default. While there are other
acquisition funds formed or forming, we believe that co-investing with
a proven, well-regarded independent management company like Dow will
more closely align the owner and operator and allow us to take greater
advantage of the opportunities that lie ahead in the hotel industry.”
“We have a long history of co-investing with both public and private
investment groups,” Murray Dow added. “There still is substantial
turmoil in the credit markets, although it is beginning to sort itself
out. We believe this will accelerate the number of properties
coming to market at more attractive pricing.”
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