Officials of HEI Hotels & Resorts plan to spend up to $1.5 billion during 2009.
“We continue to actively seek hotels for our portfolio of full-service, upper-upscale hotels in areas with high barriers to new development,” said Steve Mendell, executive vice president of acquisitions and development of HEI.
The fully discretionary fund has approximately $500 million in equity and intends to acquire or develop between $1.5 billion and $2 billion in hotels and resorts over the next two years.
“For the first time in about 16 months, we are beginning to see hotel prices come in line with market expectations as the expectation gap narrows between buyers and sellers,” said Mendell. “We expect this trend to continue, with prices becoming even more attractive as the year progresses. Since we do have dry powder, we expect to be at the forefront of the acquisition wave, which we expect to begin in the near future.
The new fund will target full-service, upper-upscale and luxury hotels, resorts and premium select-service hotels in the U.S., Canada and the Caribbean affiliated with established leading brands.
“Cash always is king in this part of the real estate cycle, which we believe will give us a competitive advantage, coupled with our ability to innovatively structure transactions and our track record of closing quickly at an agreed-upon price,” said Mendell.
According to Mendell, desired locations include downtown central business districts in urban, premium suburban and airport sites.
