REAL ESTATE - Clarion Partners figures to become a major player in the investment of hotels with its creation of a new investment unit, The ING Clarion Hospitality Group. This was established to take over responsibility of the real estate manager’s hotel investments.
Its first major action is assuming management of a portfolio of Courtyard by Marriott Hotels located around the US. The ownership of the properties is held by The State of Michigan Department of Treasury.
The gross value of the portfolio is $1.7 bn(€1.3bn). The properties were last valued at the end of 2005. The assets were first acquired in March of 2005. There are a total of 116 properties located in 29 states around the country. The properties amount to more than 17,000 rooms.
Managing director Chuck Lathem thinks that now is a good time to be trying to invest in hotels. He said, "Business travel is up from previous years. More baby boomers are looking for places to spend their vacation dollars. These factors have helped to fill up many hotel rooms across the country."
Clarion Partners will be looking to invest in a variety of hotels. Lathem said, "We will be considering luxury product and full- and limited-service hotels geared for the business traveler.
" The deals could involve buying existing assets and investing equity in new development projects. One transaction that has been completed is placing equity for the development of the 1,190 room Hilton San Diego Convention Center Hotel in San Diego. Some of the chains that the company likes will include Hilton and Marriott.
The company has recently also acquired a 9.8% interest in the Central Park Marketplace in Fredericksburg, Virginia. The real estate manager purchased the small percentage as this was the only part of the asset that was up for sale.
Many people in the industry are calling Central Park Marketplace the largest power centre on the East Coast and one of the largest in the country.
Clarion’s senior vice president Mark DeLuca worked on the transaction. He said, "We feel very fortunate to be able to own a small piece of this property. This was an off-market transaction. I have been talking with the seller for many years about buying a portion of the property. The seller was developer Carl D Silver. He is 82 years old and wanted to trade this last part of the power centre."
In a separate development ING Clarion has appointed former Deutsche Bank vice-president Nelson Wong as senior investment analyst in its Hong Kong office.
Wong will be responsible for evaluating listed real estate companies throughout the Asia—Pacific region.
The firm said his appointment signalled a boost to its global research capabilities. "We’ve long had analysts covering Asia but Nelson’s appointment reflects our vision of continuing to build our research in the region," said a spokesman.
Although the firm has no plans to enlarge the regional research team in the near future, the spokesman added: "We’ll build as necessary."