Sunday, May 18, 2008

Starwood Hotels & Resorts Aggregate $600M Of Senior Notes Rated BBB-

NEW YORK -- Standard & Poor's Ratings Services has assigned its 'BBB-' rating to Starwood Hotels & Resorts Worldwide Inc.'s proposed $400 million senior notes due 2018 and to the $200 million add-on to its senior notes due 2013.

(Starwood property Four Points by Sheraton Hangzhou, China, at top left)
The proceeds will be used to reduce outstanding borrowings under Starwood's revolving credit facilities.All other ratings for the company, including the 'BBB-' corporate credit rating, were affirmed. The rating outlook is stable.

"The rating on White Plains, N.Y.-based Starwood reflects the company's large, high-quality, and geographically diversified hotel portfolio with many well-established brand names," said Standard & Poor's credit analyst Emile Courtney.

We expect that Starwood will pursue an operating strategy and financial policy of balancing share repurchases, dividends, and growth investments to maintain an investment-grade financial profile over the lodging cycle.

(Starwood property St. Regis Resorts & Residences, Bal Harbour, FL, at middle left photo)

These positive credit factors are partly tempered by aggressive share repurchase activity over the last few years, the sensitivity of lodging demand to economic cycles, and the company's exposure to the performance of its largest owned hotels.

We continue to expect the lodging environment inside and outside the U.S. to remain supportive of improvements in operating performance in Starwood's lodging business in 2008.

In April 2008, Starwood generally affirmed its 2008 guidance for profitability measures, including EBITDA, and raised its comparable worldwide operated hotel revenue per available room (RevPAR) guidance for 2008 to 8%-10% from 4%-7%, almost entirely reflecting a weaker U.S. dollar in international markets with no change in the underlying local currency RevPAR growth expectation for 2008.

The company's exposure to owned and leased hotels remains a key rating factor. (Starwood property Sheraton Grande Tokyo Bay Hotel at middle right photo)

Even though these properties comprise only 10% of its total room base, they generated about 35% of EBITDA in 2007. Starwood remains a large owner of 74 upper-upscale and luxury hotels that are branded Sheraton (25), Westin (14), "W" (9), The Luxury Collection (9), St. Regis (4), Four Points (4), and nine others. In addition, we expect the company to continue to have 100% of its rooms concentrated in the upscale and luxury hotel segments.

Media contact: Mimi Barker, New York, (1) 212-438-5054 Analyst Contact: Emile Courtney, CFA, New York, (1) 212-438-7824

RP Realty Partners Awards CB Richard Ellis Exclusive Listing for The Plaza

ORLANDO, FL - RP Realty Partners, LLC a privately held, fully integrated real estate investment and operating company headquartered in Beverly Hills, California, is fast becoming a lynchpin in the continued renaissance of downtown Orlando, announced they have awarded CB Richard Ellis the exclusive listing agreement for The Plaza (top right photo).

CB Richard Ellis is a worldwide leader in commercial real estate services. Bobby Palta, Senior Associate, (photo at left) Wood Belcher,(photo at left below Palta) First Vice President (both with the Retail Properties Group), and Nan McCormick, (photo at right) Senior Vice President (Office Properties Group) are currently exclusively representing over 102,000 square feet of retail, restaurant and entertainment space on the first and second floors of The Plaza in Downtown Orlando.

The property is located at the Northeast Corner of Orange Avenue and Church Street in the heart of Orlando's Central Business District.

"The Plaza property is Downtown Orlando's premier retail venue. With the progress that has been made thus far by developers partnering with the City of Orlando, downtown Orlando has made tremendous strides towards becoming a 24/7 city.

"The lease up of the remaining retail space in The Plaza development will be key in making progress towards that goal. Targeted users include a theater, entertainment venues, destination restaurants & bar/lounges as well as retail and services for the ground floor retail," said Belcher and Palta.

Over $800 million dollars in new projects including a new Arena for the Orlando Magic scheduled to open for the 2010 basketball season and new state of the art four theater Performing Arts Center are all slated for downtown Orlando just blocks from The Plaza.

In addition, construction of new access ramps to both the Interstate 4 and the 408 East West Expressway Interchange will also increase connectivity in and around Downtown Orlando which much of the off ramp traffic eventually flowing right by the Plaza via Church Street.

The Plaza is uniquely positioned in the 100% location to capture the daytime and nighttime energy within Downtown Orlando.
With more than 7.1 million square feet of office space at a 9.4% vacancy rate (Florida's lowest) and 137,041 employees working within two miles, The Plaza is positioned well for Downtown's workforce.

The half-dozen gentrifying neighborhoods in and around Downtown provide a young, active population base to generate success for retailers and restaurants in The Plaza - more than 286,000 people within five miles.

RP Realty Partners invests in middle-market transactions ranging form $10-100 million and provide debt & equity capital for real estate properties throughout the United States. They are fast becoming one of the key owners in the Orlando MSA, with their interest in The Plaza, Altamonte Town Center, Baldwin Park and several other retail centers.

Bobby Palta, 407 839 3124,
Jessica Wilhoite, 407 839 3158,

Abu Dhabi Real Estate Still Climbing a Wall of Worry

ABU DHABI, United Arab Emirates--Investors are still suffering angst at imagined risks in the Abu Dhabi (Downtown Abu Dhabi top right photo) property market, just like in the early days of Dubai. And yet confidence is growing.

The Cityscape Abu Dhabi exhibition was extended by one-day last week amid record attendance by would-be investors. But what are the risk factors that leave buyers still facing a wall of worry?

Let us divide these risk factors into two categories: imaginary and real. This is a pretty fair framework of analysis for a new market where there is little by the way of hard facts and much hype and speculation. One red herring is the shortage of mortgage finance argument.

Only this week a report from the Department of Planning and Economy warned rather alarmingly that commercial banks are tending to provide short-term money for speculation rather than mortgage finance. Well, given that almost nothing has been handed over yet, is that very surprising?

Yes, there is speculation in flipping properties – like that seen in Dubai a few years ago – but this is a sign of a healthy market and rising prices.

What would be a worry is if commercial banks failed to come up with mortgage products when they are needed. This might entail capital increases for the sector, which is not presently allowed to lend more than 20% of deposits against property.

So how about real risks to the sector? Building material costs are certainly rising but then so are property values. This could signal problems for developers who sell cheaply off-plan today and face higher than expected construction costs tomorrow.

(Capitala's Arzanah development at left is one of the latest projects, open only to nationals.)

You could also wonder who is going to live in the residential mega-projects now under construction. Oil and gas is not a big employer and is by far the main business in Abu Dhabi.

Ancillary concerns and related industry are expanding but there could be a supply and demand mismatch in the future. Projected future growth of Abu Dhabi entails the attraction of millions of expatriates and is not down to internal population growth. That means an economic downturn would result in a loss of population.

On the other hand, in the short term the Colliers International forecast of a shortfall of 100,000 residential units by 2010 compared with the current supply of 180,000 suggests that oversupply will not become an issue for many years.

Indeed, when likely time over-runs on very ambitious mega projects are considered supply seems hardly an issue. The real risk, of course, in Abu Dhabi property is not getting involved.

Colliers points to a 100% increase in land values from 2005 to 2007, but still to a very reasonable $1,000 per square metre. Add in spiraling oil prices – with Goldman Sachs predicting $150-$200 within 18 months – and negative real interest rates courtesy of the dollar-pegged dirham, and you have a formula for successful real estate investment.

As ever though, remember the rule on location and be careful who you do business with. Nothing lasts forever, of course. (Palm Island development in Dubai is at right photo).

Perhaps too much luxury housing will be built and not enough for workers. But investing in the capital city of the oil-rich UAE at current prices still looks a no-brainer.

Marcus & Millichap Sells Fairfield Inn & Suites for $7.5M

TAMPA, FL--The sale of Fairfield Inn & Suites was announced by Steven M. Ekovich, First Vice President and Regional Manager for the Tampa, Florida office of Marcus & Millichap Real Estate Investment Services.

The Fairfield Inn & Suites is an 83 unit interior corridor hotel, located at 12260 Morris Bridge Road in Temple Terrace, Florida.

The property sold for $7,500,000 to 3H Group, Inc. based out of Chattanooga, Tennessee. The seller, Baywood Hotels of Maryland, purchased the property in August of 2006.

Jaimin Patel, Senior Associate and Niven Patel, Associate of Marcus & Millichap’s Tampa office represented the sellers and Jaimin Patel and Jeffrey Solenberger represented the buyer in this transaction.

Sue Sampson, Brokerage Administrator/CAST, Marcus & Millichap, 7650 Courtney Campbell Causeway, Suite 920, Tampa, FL. 33607. Phone: (813) 387-4700. Fax: (813) 387-4710

Steven M. Ekovich, Marcus & Millichap, (813) 387-4700