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Hotel Industry Trends |
Saturday July 4th, 2009 |
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Hotel Financing looking at a new benchmark - The $100 billion deal - By Jim Butler, author of www.HotelLawBlog.com |
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As more than 120 providers of capital - debt and equity capital for hotels - prepare to head to Los Angeles for the ultimate face-to-face summit with consumers of hotel capital in Los Angeles on May 3, 2007 at JMBM's Meet the Money(R) Conference, a fitting benchmark has been surpassed. The $100 billion deal is now 'on the table' and may be about to happen! |
I talked about it earlier here on www.HotelLawBlog.com when it still seemed unthinkable, and that was only January of this year.
In these postings, I mused that the new ability of the private equity guys to raise virtually unlimited amounts of capital suggests that even a $100 billion deal is possible, and noting that the entire capitalization of the hotel industry is less than the Equity Office deal completed earlier this year.
Well today, the Wall Street Journal has a breaking story that a consortium of banks led by Royal Bank of Scotland Group PLC has made an offer to buy ABN Amro Holding for 76 billion euros (or $103 billion), outbidding Barclay's 64.9 billion euro offer. This deal does not involve any hotels, but raising capital is something a commodity business -- it does not matter what the capital is for; the capital raising machine has surpassed all the old limits. Anything could be next.
What does this portend?
These are certainly exciting times. Hotel financing is about as readily available as it is likely to get, for big deals or small ones, for new development or refinancing of exiting product. That will be the entire focus at our Gateway to Hotel Finance in Los Angeles next week on May 2, 2007 at the Sheraton LAX. Whether you are a provider of capital or a consumer of capital -- a hotel lender or a hotel borrower -- if you can't hook up with the right people next week, something must be wrong. Because next Thursday is time for Meet the Money(R) 2007. Hope to see you there.
Jim
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Jim Butler is the author of Hotel Law Blog, the premier source for hotel related legal news and information.
He is recognized as one of the top hotel lawyers in the world. He devotes 100% of his practice to hospitality, representing hotel owners, developers and lenders. Jim leads JMBM's Global Hospitality Group(R) -- a team of 50 seasoned professionals with more than $40 billion of hotel transactional experience, involving more than 1,000 properties located around the globe. |
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