Concord Starts PE Fund For Distressed Hotels
Tuesday, October 06, 2009
Source: The Deal
The Deal reports: Things are expected to get so ugly that even newbies to private equity investing are trying their hand. Concord Hospitality Enterprises Co., a hotel management company that operates franchisees for Hyatt, Starwood and others, announced on Monday that it's in "the initial stage of forming a $300 million discretionary private equity fund ... which will focus on acquiring distressed hotels and debt."
With the new vehicle, which is expected to close within the next 90 days, Concord plans to double the size of its portfolio of hotel properties. And if the commercial real estate market gets as bad as some think it will, companies like Concord will have plenty of opportunity to pick up property on the cheap.
In July Real Capital Analytics found 5,315 troubled commercial properties nationally, valued at more than $108 billion, and in June, Real Estate Econometrics LLC predicted that the default rate on commercial real estate is likely to reach 4.1% by year's end. That projection would imply defaults on about $44.3 billion of commercial mortgages, based on the $1.08 trillion of such loans held by U.S. banks in the first quarter, according to data in the report.
View the full article on The Deal: Concord Starts PE Fund For Distressed Hotels
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Posted by: Mark Alferman