Friday, April 10, 2009

StepStone Hospitality Formed to Provide Third-party Management to Upscale Independent Boutique and Branded Hotels

Experienced Team Brings Strong Asset Management Support and Restaurant Expertise to Optimize Returns

PROVIDENCE, R.I.—An elite group of senior hotel and restaurant officials with more than 90 combined years of operating and asset management experience announced the formation of a new third-party management company to operate upscale boutique and branded hotels and resorts.

Called StepStone Hospitality, the company is a sister organization to Hotel Asset Value Enhancement, Inc. (hotelAVE), one of the nation’s largest hotel real estate advisory firms specializing in hospitality asset management and due diligence.

StepStone will focus on hotels of up to 400 rooms, with an emphasis on urban and premium suburban boutique and branded properties located in the eastern half of the United States.

StepStone currently operates The Hotel Providence, (bottom left photo) a luxury, Four Diamond, boutique hotel in the heart of Rhode Island’s state capital and has had management oversight of luxury to three-star properties in Boston and New York.

The company distinguishes itself from other third-party management companies with a strong emphasis on strategy and asset management and unparalleled, in-depth restaurant expertise.

The company’s three principals are:

Thomas Russo, (top right photo) CEO and president, a 45-year hospitality veteran with extensive experience in hotel, resort and restaurant operations, including boutique hotels, major hotel chains and leading restaurants. He has developed and operated numerous award-winning restaurant concepts and is widely regarded as one of the industry’s most creative and strongest operators.

James McGrath, (middle left photo) chief operating officer and partner, with a 25-plus year career as an hotelier overseeing the operations of more than 250 hotels, both branded and independent. He most recently headed up hotel operations for Lodgian, Inc.’s 40-property portfolio.

Michelle Russo, (middle right photo) partner, brings a strong background in asset management and strategy with experience in hotels valued at more than $2 billion. She is president of hotelAVE and previously managed a $500 million hotel portfolio for John Hancock Mutual Life Insurance. Russo is a former hospitality and real estate financial analyst at Deutsche Bank.

“We created StepStone to respond to specific requests from a number of institutional and private investors who wanted strong, hands-on operations by senior leadership, world-class strategic asset management and food and beverage expertise to generate the highest possible hotel investment returns in all phases of the economy,” said Thomas Russo.

“The missing ingredient in most third-party management is a strategic mind-set.

"In addition to on-site management, which focuses solely on day-to-day operations, every StepStone-managed property has a highly experienced regional support team that focuses on strategy.

"That team oversees only a limited number of hotels, and each team has an asset manager who is a true owner’s representative. That person is responsible for benchmarking and constantly seeking new ways to further enhance the operation and returns.”
The company has the ability to co-invest with owners, as well as bring multiple tranches of equity to projects.

StepStone Hospitality is located at:333 Westminster St. Suite 3Providence, R.I. 02903. PH (401) 865-6901.
Additional information about the company may be found at

Contact: Jerry Daly or Chris Daly, Daly Gray Public Relations, (703) 435-6293,

Innkeepers USA Trust Suspends Payment of First Quarter Dividend on 8% Bond Series

PALM BEACH, FL – Innkeepers USA Trust (OTC: INKPP) has suspended payment of its 2009 first quarter dividend on its 8% Series C Cumulative Redeemable Preferred Shares.

Decisions regarding future quarterly dividends on the 8% Series C Cumulative Redeemable Preferred Shares will be made by Innkeepers’ board of trustees based on financial and economic conditions and other factors that the board deems appropriate.

A description of the 8% Series C Cumulative Redeemable Preferred Shares, is available in the Amended and Restated Declaration of Trust of Innkeepers USA Trust and the Articles Supplementary to the Declaration of Trust.

Certain information regarding the 8% Series C Cumulative Redeemable Preferred Shares may be found on the company’s website at

Innkeepers USA Trust is a real estate investment trust (REIT) and a leading owner of upscale and extended-stay hotel properties throughout the United States. The company currently owns interests in 74 hotels with approximately 10,100 rooms in 20 states and the District of Columbia.
Patrick Daly,Daly Gray Public Relations, Tel (703) 435-6293. Fax (703) 435-6297.
Dennis Craven, Innkeepers USA Trust, (561) 227-1302.

Ending Insanity on Madison Avenue

By Christopher DeCrosta, (top right photo) Vice President of Madison Retail Group, Chicago.

CHICAGO, IL--USA Today’s article about Madison Avenue vacancies is more than five years in the making.

The vacancy rate on Madison Avenue is certainly among the highest and most noticeable in the city, but it does not come as much of a surprise to those familiar with this market.

Rents over the past 5 years have grown at an alarming rate. Other than Fifth Avenue, Madison was the first retail strip in New York to break the $1,000 per square foot barrier.

Once it did, it quickly became $1500 per square foot and until the recent downturn asking rents exceeded $2,000 per square foot.

The fact that space did not sit on the market for very long emboldened landlords to continue to charge such astronomical rents. International luxury brands or jewelry retailers quickly snatched up the space and in many cases the high rent numbers were absorbed in part by their large marketing budgets.

Years ago, Madison Avenue was the only destination for luxury shopping in Manhattan. Much of the rest of Manhattan has changed while the Madison rents skyrocketed.

Neighborhoods like SoHo and The Meatpacking District became viable alternatives for high-end retail. Retailers like Moschino, who only require one Manhattan location, opted to move to West 14th Street for a fraction of the cost that would have been required to renew on Madison.
These newer neighborhoods offer brands the ability to appeal to a younger, hipper crowd – one that might reject Madison Avenue’s perceived stodginess.

The real victims of the Madison Avenue collapse have been the smaller and local brands.

Forced to renew at rents 3-4 times what they had been historically paying, many tenants have found themselves underwater and unable to stay afloat. There is a positive side of all this turmoil, however.

Once rents correct and stabilize at a lower number, it will allow these smaller retailers to return to the market.
Not only will this relief be good for the retailers, it will add diversity and charm to Madison Avenue and once again make it one of the world’s most unique shopping destinations.

Contact: Kurt Ivey,