Eagle Hospitality Properties Trust 8.25% Series A Cum PFD (EHPTP)

[Enterprising Investor]

A shot in the dark.

Please contact me if you have financial statements from any period after the company went dark.

[Juschilln]

I think you're "hot".

[Hank Moody]

What Happened?

I’m speculating on what happened here.

Apollo and Blackstone made a deal. Apollo knew there was no possibility of getting anything on their equity and they didn’t want any risk that their “bad boy” clause might trigger. Blackstone wanted to own these hotels on the cheap, at say, $132,000 per room (price of note purchase from FRBNY).

To give Blackstone what it wanted, Apollo gave a sweetheart forbearance agreement in September that made it impossible to maximize value within a short period, plus allowed Blackstone to take all the cash with the keys, and never need to go to court to perfect the foreclosure or legitimately auction the properties. As part of the deal, of course, Apollo eliminates the bad -boy risk.

So, despite all the analysis here on cap rates, room values, cash build, this was all a setup from the start with a fictitious attempt to sell the hotels to maximize value.

Am I warm or cold?

[ChuckD-MSB]

I don't recall any document or PR saying Dec 10th was the drop dead date.

[mrholty]

No position here but I watch a few of you guys.

Was there ever any filings back in septmeber that the extension by Blackrock was only 90 days? That seems material enough to me that it should have been in a filing.

I agree that there should be a lawsuit. The money we are talking about is large enough.

Ugly news for those invested. Sorry guys.

[Lawrence 147]

http://www.sacbee.com/2012/12/11/5046179/eagle-hospitalitys-secured-lender.html

[ChuckD-MSB]

I expect one as well, the fund that owns nearly half the shares should buy up the remaining ones cheap and sue like crazy.

I banked big on this one, took profits but held some "free" shares, got punched in the gut for over 20K today.

[vpagano]

Sorry to hear that, I usually try to post buys and sells everywhere I'm at on the Internet but simply didn't update this one in time. I hope your position was a small one like mine was.

[Enterprising Investor]

Expect class action lawsuit.

[Enterprising Investor]

I was not so lucky.

Sold my entire position this morning.

[vpagano]

Sorry I didn't mention I had sold my small stake here last week to put into other investments. Got out with a small gain at a hair above $5.

Eagle Hospitality's Secured Lender Takes Ownership of 13 Hotels

PR Newswire

PURCHASE, N.Y., Dec. 11, 2012

PURCHASE, N.Y., Dec. 11, 2012 /PRNewswire/ -- Eagle Hospitality Properties Trust, Inc. ("Eagle Hospitality") announced today that its secured lender, an affiliate of Blackstone Real Estate Partners VII ("Blackstone"), has taken ownership of Eagle Hospitality's entire portfolio of 13 hotels.

Eagle Hospitality entered into an agreement with Blackstone on September 7, 2012, that delayed foreclosure on its 13 hotels, permitted Eagle Hospitality to attempt to sell the hotels and provided Eagle Hospitality the right to repay its secured debt at a discount.

Eagle Hospitality, with the assistance of its chief restructuring officer and Lazard Freres & Co. LLC, engaged in an extensive process to sell its assets at an aggregate price that would exceed the discounted payoff amount.

Eagle Hospitality was unable to secure one or more definitive contracts to sell its assets by December 10, 2012, which triggered the secured lender's remedies. Pursuant to those remedies, Blackstone has taken ownership and control of substantially all of Eagle Hospitality's assets, including all of its operating and real estate assets.

With limited remaining assets, all of which will be used to wind up its affairs, and no remaining real estate or operating assets, Eagle Hospitality expects that no distributions will be made, now or in the future, to the holders of Eagle Hospitality's 8.25% Series A Cumulative Redeemable Preferred Shares or to the other equity holders of Eagle Hospitality or its operating partnership, EHP Operating Partnership, L.P.

Read more: http://www.digitaljournal.com/pr/970585#ixzz2Ekwg2Lik

[ChuckD-MSB]

Email from my buddy that first got me into EHPTP (back at .30-.50)
For some reason the per key table is not copying very good.


Published in CoStar Group Newsletter, CoStar is the # 1 Commercial Real Estate Information Company!

http://www.costar.com/
High-End Hotel Investment Sales Getting Hot Again After Six-Month Lull
Strong Lodging Fundamentals Tempting Owners of High-End Assets To Cash Out
By Randyl Drummer
August 29, 2012

After trading at a blistering pace last year, high-dollar hotel investment sales cooled off considerably in the first half of 2012. However, early third-quarter transaction activity suggests that lodging sales should finish the year on a strong note, according to CoStar sales data and comments from leading hospitality CEOs.

Total volume of sold hotel transactions valued at $25 million and above was $2.5 billion in the first six months of 2012 -- well below the strong $6.4 billion recorded in the first half of 2011, according to preliminary sales transactions analyzed by CoStar. Thanks to a handful of hotels that sold for top dollar, sales volume has already surpassed second-quarter 2012 and about equaled first-quarter figures just a month into the third quarter. The average price per key remained strong at around $233,500 at midyear.
....................................................................................................................................................................................................
So Let me insert an Eagle fact sheet into this story here;

Average Per Key Rate High End Hotels First Half 2012 >>>>


$233,500














Cincinnati Landmark Marriott




321

Chicago Marriott Southwest at Burr Ridge




184

Hyatt Regency Rochester - 25 stories




336

Embassy Suites Hotel Columbus / Dublin





284

Embassy Suites Hotel Cleveland/Rockside




271

Embassy Suites Hotel Boston at Logan International Airport




273

Embassy Suites Hotel Denver-International Airport




174

Embassy Suites Hotel Phoenix-Scottsdale




270

Embassy Suites Hotel Tampa-Airport/Westshore




243

Embassy Suites Hotel & Casino San Juan




299

Embassy Suites Hotel Cincinnati-RiverCenter




226

Hilton Glendale




351

Hilton Cincinnati Airport




306





Value of Eagle Hospitality Assets Based On Key AVERAGE in 2012




$826,123,000.00




3538





If this holds true, the EHPTP play should pay 100% of Preference Value PLUS All interest DUE to Preferred share holders! All right you kids get back to your homework and read what's below! (Don't forget they are hoarding cash as well!)
......................................................................................................................................................................................
The uptick in sales in recent weeks come as the U.S. hotel industry heads into the Labor Day weekend, traditionally one of the busiest travel and vacation periods of the year, and reflects what lodging analysts say is the continuing and growing strength in fundamentals in spite of this year’s slow economic growth and fiscal uncertainty.

In an updated lodging forecast released this week, PwC (PricewaterhouseCoopers) expects the recovery in revenue per available room (RevPAR) to continue through the end of the year, with slightly stronger gains in both demand and room pricing than previously anticipated.

Despite the slow economy, U.S. business and leisure travel continues to recover, including stepped-up corporate meetings and a greater number of international visitors, with hotels experiencing solid demand and room rent gains in the second quarter.

Along with year-over-year gains in group bookings in place for the balance of the year, these improvements have resulted in an expected RevPAR increase of 7.2% in 2012 and 5.6% in 2013. Overall, PwC expects lodging demand in 2012 to increase 3%, while the still-restrained supply of rooms will grow at just 0.5%, boosting occupancy levels to 61.5%, the highest since 2007.

Buyers, Sellers Get Off the Sidelines

Such numbers are prompting sellers to get off the sidelines. Evident of the boost in third-quarter sales activity has been a pair of large sales in recent days of W branded hotels by Starwood Hotels and Resorts Worldwide, Inc. (NYSE: HOT).

Annapolis, MD-based Chesapeake Lodging Trust last week acquired the W Chicago Lakeshore, a 520-room property at 644 N. Lakeshore Drive, from Starwood for $126 million, or $242,308 per room. Two days later, Starwood announced the sale of the 258-room W Los Angeles at 930 Hilgard Ave. in the Westwood submarket, to Pebblebrook Hotel Trust for $125 million. That's a whopping $484,500 per key.

Also this week, a GE Capital affiliate sold the 472-room Sheraton Nashville in downtown for a reported $47.5 million to private owner/developer JRK Hotel Group.

The sales activity at the high end of the market mirrors especially strong fundamentals for luxury properties. While hotels across the spectrum are benefiting from the recovery, those in the higher-priced tiers are expected to see the strongest gains, according to PwC.

Occupancy levels at hotels in the luxury, upper-upscale and upscale segments are expected to meet or exceed each segment's 2007 peak. Hotels in the lower-priced segments have not experienced as solid of a recovery in occupancy but are still expected to realize increased room rates as demand gradually strengthens.

"With occupancy surpassing recent prior peak levels in the luxury, upper upscale, and upscale segments, the lodging recovery is intact," said Scott D. Berman, principal and US industry leader, hospitality & leisure, PwC.

Starwood Pursues 'Asset-Light' Strategy

Starwood has pursued an "asset-light" strategy in recent years, opting to focus on fee income from hotel operations and management. During a recent call with investors, the company laid out plans to unlock $4 billion to $5 billion in cash by selling its hotels and Bal Harbour condominium residences.

The majority of that cash will come from eliminating most of Starwood’s owned hotel portfolio, said Frits van Paasschen, CEO, president and director.

"We'll continue to bring our own hotels to market, either one at a time or all at once, depending on demand," van Paasschen said. "It's important also to note that after generating all that cash, we're left with a global high-end fee business, which is an investor's dream as the business model.

"The fee business is built on long-term contracts, low variable costs, but absent the capital needs and volatility of owned real estate."

Compared with three to six months ago, "We have more [properties] on the market and we're having more discussions than we were prior to that. And that reflects a greater confidence among buyers and presumably some better financing conditions among buyers than we've seen for some time," van Paasschen said.

While Starwood may be poised to sell more hotels, it could pull back if the company doesn’t feel it’s getting the appropriate price for the asset, he said.

Strong Second Half of Year Expected

Jon Bortz, chairman, president and CEO of Pebblebrook Hotel Trust (NYSE: PEB), one of the most active hotel buyers in recent years, predicts stronger overall investment activity in the second half of 2012.

"I think what we can say is that the activity level in the second half for the industry and hopefully for us will be significantly higher than it was in the first half," Bortz said in an investor call. "We've seen a very positive momentum in the number and quality of assets in the major gateway markets that we have an interest in, and we believe that we will continue to get at least our share in both on-market and off-market transactions."

"Right now we continue to be excited about making acquisitions. We think it's still very early in the recovery. We think in almost all markets except for select service in a couple of major cities, we are a long way from replacement cost, and capital availability for new construction, particularly in urban markets outside of New York, is very, very limited."

Earlier in the year, there was an anticipation that the second half of 2012 would be somewhat like the first half of 2011’s very high level of activity, noted W. Edward Walter, CEO and president of Host Hotels & Resorts.

"I'd say expectations have moderated a bit. But clearly, we're seeing more activity, more opportunity right now than we did in the beginning of the year, and I think that doesn't surprise me in some ways. I think conditions are better," Walter said.

"We certainly still are looking to be active," said Walter, adding he’s very confident Host will be a net acquirer of properties in the near term, depending on how asset pricing plays out.

In the last buying cycle in 2006 and 2007, Host Hotels started to see pricing that "was so strong that under the assumptions under which we were comfortable underwriting assets, we started to find that we just weren't competitive as the buyer," Walter noted.

"Not because we didn't have a low cost of capital, but I think others were just being very aggressive," Walter said. "We made a decision at that point that we were better off being a seller than a buyer. I clearly anticipate that we will find the same sort of dynamic happen at some point in this cycle.

"I don't see any real signs of it yet, so I suspect that even as we look at [2013] we would still be active on the acquisition front, but it's hard to predict beyond that right now."

At least one other major chain doesn’t expect to see much acquisition activity in the next six months. Mark Hoplamazian, president and CEO of Hyatt Hotel Corp (NYSE: H), said the company is more focused on development and isn’t actively marketing any properties via third-party brokers. But Hyatt will likely sell "a property" before the end of the year, though it’s not likely to be a large transaction, Hoplamazian said.

[vpagano]

Hmm interesting. Here's what I got:

"Dear Mr. Pagano,

Please be advised that your order to Sell EHPTP which was executed at $5.92 today, 11/15/2012 was “ruled to bust” by the Market Center due to a bad execution. Please feel free to place a new order. Your Activity page will be incorrect until tomorrow. We apologize for any inconvenience that this may have caused you and thank you again for your valued business."

[ChuckD-MSB]

Thank you for contacting us in regard to the order execution alert you received. I appreciate this opportunity to assist you.

Upon review of your trade, I confirm your sell order for 500 shares of Eagle Hospitality Properties Trust In (EHPTP) order was not actually executed. The day high for EHPTP was $4.92. It appears as though the alert you received was auto-generated in error due to a systems issue. I apologize for this inconvenience. I can assure you this issue has been reported to the appropriate group for review.

We appreciate you choosing to invest with Fidelity.


Sincerely,

Nicole E. Nelson
Fidelity Brokerage Services LLC, Member NYSE, SIPC

[ChuckD-MSB]

Thanks, I was planning on setting a buy at $4.50 to replace them if they sold, someone keeps getting lucky at $4.50 every few days.

[vpagano]

I made a quick call to my broker and the rep said there was an execution mistake at the exchange level. They were ordered to bust the trade and it would be correctly reflected overnight to still have the shares.

[ChuckD-MSB]

Really weird, I got this email Thu Nov 15, 2012 03:38:30 PM EST

Order to SELL EHPTP: 500 shares filled @ $5.92. Execution time: 03:38 PM.

Then at 3:43 I got this one Thu Nov 15, 2012 03:43:17 PM EST


Order to SELL EHPTP: Nothing Done. Execution time: 04:00 PM.


HTF do they know nothing was done at 4PM 17 minutes before 4 ?

[vpagano]

Wow, mine just reappeared too in the holdings column. Interesting. Now that we've closed I don't see anything that high either. I thought it had been a typo at $4.92 but that wouldn't have passed my limit.

[ChuckD-MSB]

I got a confirmation order for 500 of mine at $5.92, but my sharecount did not decrease and I don't see any trades that high.

[vpagano]

Well someone really wanted shares, they knocked out mine at $5.92 today. I can't argue with a quick flip like that with a special situation based on a binary event.

Gotta love illiquid securities.

[vpagano]

Then my old hometown Hilton too:

$22.2 MM / 341 = $65K per room

http://www.pennlive.com/midstate/index.ssf/2012/06/harrisburg_hilton_sold_to_gree.html

An affiliate of Harristown Enterprises Inc. has sold the Hilton Harrisburg hotel to a Denver-based hotel investment group. Harrisburg Hotel Corp. sold the 341-room Hilton to Greenwood Hospitality Group LLC.

Although executives from both companies wouldn't share a sale price, a realty transfer tax statement from the Dauphin County Recorder of Deeds office indicates that Greenwood paid $22.2 million for the property, which is close to its listed fair market value of $23.8 million.

Hilton Harrisburg 20th AnniversaryView full sizeChris Knight, The Patriot-NewsACharity Grilling Party benefiting Easter Seals during the Hilton Harrisburg's 20th anniversary celebration in 2010.
Greenwood Principal Thomas W. Conran said the hotel will remain a Hilton and the company will retain the existing 400 employees during a 2:30 p.m. press conference held to announce the sale in City Hall.

Mayor Linda Thompson said the sale retired $17 million worth of city debt, what Harrisburg had guaranteed for the hotel.

Greenwood, which specializes in repositioning hotels, plans to invest roughly $5 million in hotel upgrades. Improvements will include new carpeting, guestroom upgrades and other refinements that will be noticeable to guests, said Conran.

The sale includes Bricco Restuarant at Third and Chestnut streets. Bill Kohl, Hilton Harrisburg president and CEO, becomes a principal with Greenwood.

Greenwood also will take over management of the Hilton Garden Inn Hershey, which was operated by Harrisburg Hotel Corp.

Brad Jones, vice president of Community Development for Harristown, said financial problems did not force Harrisburg Hotel Corp. to sell the hotel.

Harristown never intended to own and operate the Hilton for so long, Jones said. “It’s a good opportunity to reinvest in other projects,” he said.

The affiliate of Harristown owned and operated the hotel that helped spark a redevelopment wave in Harrisburg since 1990, when it opened.

[vpagano]

Hilton sale in North Carolina:

$16.5 MM / 249 = $66K per room

A joint venture between a Florida hospitality management firm and a New York private equity firm has bought the 249-room Hilton Raleigh-Durham Airport at Research Triangle Park.

Driftwood Hospitality Management and Apollo Global Management acquired the property from GE Capital Real Estate, a unit of General Electric. The purchase price was $16.5 million, according to Durham County property records.

The deal was the third hotel acquired by the joint venture. The other two properties are in Wilmington and Columbus, Ohio.

The Durham hotel is near the intersection of Page Road and Interstate 40, about three miles from RDU. It includes 3,200 square feet of meeting space.

The hotel industry suffered steep declines in occupancy during the recession, which forced owners to offer significant discounts and concessions to get people into rooms. After bottoming out in 2009, the industry has been making a gradual recovery.

The hotel occupancy rate in the Triangle last year was 60.7 percent, up 4.6 percent compared with 2010, according to Smith Travel Research, a Tennessee company that tracks the lodging industry. Revenue per available room, a key industry statistic, has also been increasing in the Triangle, though it remains about 10 percent below where it was four years ago.

Read more here: http://www.newsobserver.com/2012/04/04/1980816/hilton-hotel-near-rdu-sold-for.html#storylink=cpy

[vpagano]

Seattle Hilton sold last week:

http://www.costar.com/News/Article/Seattle-Hilton-Hotel-Sold-for-$63M/142492

AEW Capital Management of Boston acquired the 250-room Seattle Hilton Hotel at 1301 6th Ave. in Seattle, WA from RC. HeDreen Co. for $63 million, which included approximately $5.8 million in furniture, fixtures and equipment. This equates to a price per room of approximately $229,000.

The 24-story, 332,210-square-foot hotel was built in 1969 on almost half an acre in Seattle's central business district. The Hilton-branded hotel sold with an average occupancy of 84 percent and an average room rate ranging from $199 to $250 per night.

Chris Burdett of CBRE represented the seller.

Please see CoStar COMPS #2553827 for more information regarding this transaction.

[vpagano]

Marriot Sales:

http://www.review.net/section/detail/three-marriott-hotels-sell-for-33.7m/

BUYER: Suncoast Parkway Hotel Holdings LLC (MIG Real Estate LLC), Newport Beach, Calif.
SELLER: Northpointe Hoteliers LLC
PROPERTY: 2101 Northpointe Parkway, Lutz
PRICE: $13.5 million
PREVIOUS PRICE: $1 million, November 2006
Related Headlines:
Sarasota investors Cotner, Alogna buy two Longboat villa buildings Gecko’s Hospitality Group buys Bee Ridge gas station Tampa Developers building $20M Orlando hotel Atlanta’s Pollack Shores starts Tampa NOHO Flats

BUYER: Tampa Road Hotel Holdings II LLC (MIG Real Estate LLC), Newport Beach, Calif.
SELLER: Menna Oldsmar Partnership LLP
PROPERTY: 4012 Tampa Road, Oldsmar
PRICE: $9.2 million

BUYER: Tampa Road Hotel Holdings I LLC (MIG Real Estate LLC), Newport Beach, Calif.
SELLER: Menna Oldsmar Partnership LLP
PROPERTY: 4014 Tampa Road, Oldsmar
PRICE: $11 million

ATTORNEY ON DEED: Aminie Mohip Esquire, Clearwater

PLANS, DESCRIPTION: MIG Real Estate LLC purchased three hotels in the Tampa Bay area from Menna Development & Management Inc. of Clearwater for a total of $33.7 million.

The price equated to $121,661 per room.

The California-based real estate investment company purchased the 99-room Courtyard by Marriott Tampa/Oldsmar for $11 million, 78-room Residence Inn by Marriott Tampa Oldsmar for $9.2 million and the 100-room Residence Inn Tampa Suncoast Parkway at NorthPointe Village for $13.5 million.

Built in 2003, the Courtyard in Oldsmar features a swimming pool, fitness center and 2,000 square feet of meeting space. The Residence Inn in Oldsmar was built in 2005 and houses two meeting rooms and a fitness center. The 4-year-old Residence Inn in Lutz features a heated swimming pool, exercise room and a sports area.

These acquisitions are MIG Real Estate’s first in Florida and increases its overall hotel portfolio to eight properties. Concord Hospitality Enterprises will operate all three properties.

The new ownership has announced plans to renovate the lobbies, guestrooms and other public areas of the two Oldsmar properties.

CBRE Hotels’ Robert Taylor in Miami and Ron Danko in New York City handled the transaction on behalf of the seller.

“There are more buyers than sellers right now in the hotels market,” Taylor says. “Capital is more widely available for buyers, and sellers are making strategic decisions to bring their assets to market in this profitable environment. Hotels are projected to continue to perform well in the next few years.”

Since mid-2009 MIG Real Estate has added nearly 5 million square feet of commercial real estate totaling more than $650 million in assets under management.

[vpagano]

Looks like they could be.

http://www.bizjournals.com/atlanta/print-edition/2012/06/29/king-of-downtown-hotels-puts-out-for.html?page=all

Atlanta’s largest hotel is for sale — and could bring up to $400 million in what would be one of this year’s biggest hotel deals.

The Marriott Marquis, which has a total of 1,663 guest rooms, has sold just once since it was built in 1985.

Its owner, Bethesda, Md.-based Host Hotels & Resorts Inc. (NYSE: HST), is making moves to sell the downtown convention hotel. Host bought the Marquis for $229.5 million in January 1998, according to Databank Inc., an Atlanta firm that tracks real estate transactions. Jones Lang LaSalle Inc. is marketing the property.

The Marquis has 1,569 rooms, 94 suites, 61 meeting rooms and more than 28,000 square feet of exhibit space, according to the Atlanta Convention & Visitors Bureau. Famed Atlanta architect John Portman designed the hotel, which is well-known for its open atrium lobby.

“The architectural design of the building makes it unmatched to any other hotel,” said Mark Vaughan, executive vice president for the Atlanta Convention & Visitors Bureau. Vaughan served as director of marketing at the hotel from 1998 to 2001.

“Host has been a great owner,” he said. “They’ve invested significantly in that property. It’s certainly a hotel we all can be proud of in Atlanta.”

Host completed an approximately $140 million renovation of the Marquis in the summer of 2008.

And, in 2009, a pedestrian bridge was constructed to connect the Marquis to the Hilton Atlanta, which also is on the market and could fetch between$220 million and $280 million in a deal.

The Marquis also links to the Hyatt Regency Atlanta by a pedestrian bridge. Both connections in essence put around 4,000 hotel rooms under one roof, making those properties very attractive for hosting conventioneers and large events.

The recent improvements make the hotel prime for a sale, say local hospitality experts.

“The Marriott Marquis for sale makes a lot of sense,” said Paul Breslin, managing partner of hotel consulting firm Panther Hospitality LLC. “They’ve renovated, repositioned and refreshed. It’s the right time.”

Also, stronger market fundamentals and a low supply of new construction are helping make 2012 a good year to take assets to market.

“You can’t reproduce a 1,600-room hotel very easily,” said hospitality consultant Linda Wilson, president of Key Advisors Inc. She added that the Marquis is “one of the biggest players in the citywide convention business,” which makes the property attractive to buyers. Group bookings are on the rise in Atlanta, she said.

“During the recession, people just cut their costs,” Wilson said. “They didn’t attend conventions.”

But, she said, “it’s coming back. The pickup is much stronger from what they originally thought.”

Breslin estimated the hotel could sell for $250,000 to $280,000 per key. That could put a price tag of nearly $400 million on the property. He said it’s most likely that the Marriott brand would remain if the hotel traded hands.

“They’d never sell it without keeping the brand and management,” Breslin said.

Based on those figures, if the Marquis sells this year, it could be one of the largest hotel transactions in the United States.

Seven hotels have sold for more than $100 million across the country in first-quarter 2012, according to data from LW Hospitality Advisors LLC. The 934-room Park Central Hotel in New York City fetched the highest price, selling for an estimated $396 million to LaSalle Hotel Properties. That’s about $424,000 per key, according to the hospitality firm.

It’s a clear indication that large transactions are occurring, Wilson said.

“Publicly traded REITs, which were the largest buyers in 2011, have become less active due to low stock valuations,” Wilson said. “That leaves private equity firms as a prime target for the sale.”

Already this year, a handful of Atlanta hotels have sold. The 521-room Renaissance Waverly Hotel & Convention Center Atlanta sold for about $96 million in March, according to hotel consulting and appraisal firm HVS, which has an Atlanta office. The hotel is attached to the Cobb Galleria Centre, a 320,000-square-foot convention center, and Cumberland Mall.

Host Hotels did not respond to a request for comment about why it’s selling the Marquis.

The company has paid off its $164 million mortgage on the property, according to Alan Wexler with Databank.

Earlier this year, in an earnings call with investors, W. Edward Walter, Host’s chief executive, president and director, shared the company’s strategy for its portfolio.

“Recognizing that there has been a directive acquisition opportunities in North America, we are moving quickly to bring selected assets to the market, as we continue to look to recycle assets and improve the quality of our already outstanding portfolio,” Walter told investors on April 25.

In first-quarter 2012, Host sold its San Francisco Airport Marriott for about $113 million to Inland American Lodging Group Inc.

“While certainly a fine property in a top market, this sale was consistent with our strategy of reducing our exposure to noncore assets located in airport markets at attractive pricing,” Walter said. “The sale also permits us to avoid investing an incremental $15 million in capital improvements over the next couple of years.”

Host’s portfolio of more than 100 properties includes several other prominent Atlanta hotels: the Grand Hyatt Atlanta, The Westin Buckhead Atlanta, Four Seasons Hotel Atlanta, The Ritz-Carlton, Buckhead, JW Marriott Atlanta Buckhead, Atlanta Marriott Perimeter Center, and Atlanta Marriott

[vpagano]

Older but data is consistent for Embassy prices.

$22.5 Million / 222 = appx. $115,000 per room

http://www.reuters.com/article/2012/07/18/idUS202890+18-Jul-2012+BW20120718

FelCor Lodging Trust Incorporated (NYSE: FCH) today announced that it has agreed to sell the 222-room Embassy Suites – Anaheim-North hotel for $25.5 million. Urban Common, the purchaser, has made a $1.3 million hard money deposit toward the purchase price. The sale is expected to close in late August. FelCor will use the net proceeds to repay a portion of the $88 million balance on the CMBS loan that matures in 2013.

As part of its long-term portfolio repositioning strategy, which includes the sale of 39 non-strategic hotels, FelCor is currently marketing 10 hotels, including the hotel announced today. Including this sale, FelCor will have sold 16 of the 25 hotels that it has brought to market since December 2010.

About FelCor

FelCor, a real estate investment trust, owns 70 primarily upper-upscale, full-service hotels that are located in major and resort markets throughout 22 states. FelCor partners with leading hotel companies to operate its diversified portfolio of hotels, which are flagged under globally recognized names such as, Doubletree®, Embassy Suites®, Fairmont®, Hilton®, Marriott®, Renaissance®, Sheraton®, Westin® and Holiday Inn®, and premier independent hotels in New York. Additional information can be found on the Company's Web site at www.felcor.com.

[stoman23]

If we were on any other market than the Grays, I would think the volume indicates one or more prearranged transactions. I don't see how that can be coordinated on the Grays since there are no market makers. I didn't get a call from my broker asking me if I wanted to sell my shares :)

[vpagano]

I guess a hedge fund could be considered a credit union in a way....but with much higher fees haha just kidding bud. Have a great day.

[ChuckD-MSB]

Only what you posted from the credit union, I re-posted it on my site and I'm sure thousands of members of the credit union read it.

[vpagano]

Sure is some heavy buying for the price to be going nowhere. You guys see any news out there? I didn't catch any.

[ChuckD-MSB]

1,140,290 shares traded today, over 25% of the total

[vpagano]

Castle Union LLC has a position in EHPTP. How do I know? Take a look at their Q3 Letter to partners.

http://www.scribd.com/doc/110841832/2012-Q3-Letter-External

Eagle Hospitality Preferred

We have a stated strategy to invest in obscure securities, and we wasted no time by quickly establishing a position in the preferred stock of Eagle Hospitality. Eagle is a hotel REIT with a portfolio of 13 hotels that Apollo took private at the height of the bubble. The company’s $600 million of debt was purchased by Blackstone in May from the Federal Reserve for roughly 75 cents on the dollar. The debt came due at the beginning of September, but we never thought bankruptcy was a viable option for the parties involved given Eagle’s corporate structure, which would have required a long, complicated bankruptcy, and the bad boy guaranty given by Apollo (i.e., Apollo would be liable for any deficiency on the loan).

Indeed, bankruptcy did not come to pass as the company announced Blackstone has agreed to take a “meaningful” discount on its debt in conjunction with a sales process for Eagle’s hotels. Blackstone used a $350 million loan from J.P. Morgan and $125 million of equity to buy the Eagle loans, so even if Blackstone took a 90 cent pay off, they would make $65 million -- a fairly nice return on equity in less than a year.

Looking at comparable transactions, if Eagle is able to sell its hotels at an
8% cap rate, or a roughly $160,000/key, the preferred would recover $15/share. Our cost basis is $1.95/share.

I do want to quickly note the Wall Street cycle of life here with Eagle. Eagle was a bubble-vintage LBO lead by private equity firm Apollo with loans from Bear Stearns. As we all know, Bear failed and was taken over by J.P. Morgan. The Eagle loans were too toxic for J.P. Morgan, so they wound up at the New York Fed in the Maiden Lane portfolio. Five years later, another private equity firm, Blackstone, gets a loan from J.P. Morgan to buy the Eagle loans from the Fed, and thus the cycle of life is complete.

[vpagano]

Anybody else notice the buying floor on the shares recently? On a significant dip below $5 they immediately spring back.

There would be a third but limited way - buying shares EHPTP.

Possibly EI's idea in action? Hmmmm

[ChuckD-MSB]

I have a friend in OR who had been researching, I will ask. Here is his response to the first article you posted.

"This is what I told you, in every corner of this market the High end is screaming, earnings!, sales!, and on top of that, the available hotels for sale is dropping to an all time low inventory from my readings!

Clearly the lowest in the last 4 years and demand is extremely strong for hotel buyers and they are not low balling they are competing against themselves for the better brands, which EAGLE is!

This is likely the best period of the last 4 years to sell a hotel. Add to that EAGLE is clearly earning free profit of $45 million a year, I saw that in reports I found in 2009 earnings reports to shareholders in Apollo Fund V and again in 2010 in a presentation made to investors of Apollo in New York. And now in the recent subtle releases of their health we have read, Not to mention the amount they have spent on updates showing 50% of these amounts!"

[vpagano]

What's a few thousand bucks between friends eh Chuck? :)

Anyone know offhand of a master completed transaction list? The more comparable sales the better.

I got a friend a job in commercial real estate private equity in the DC area, might have to drop him a line and see what all we can dig up.

[ChuckD-MSB]

Little over 105K per room to be more exact, love all this news !!

Hopefully Hyatt and Marriot rooms are worth more.

[vpagano]

FelCor sells two Embassy Suites hotels for $70 Millon, with 666 rooms in total that comes out to a little over $100,000 a room.


http://finance.yahoo.com/news/felcor-agrees-sell-two-non-120000503.html


IRVING, Texas--(BUSINESS WIRE)--

FelCor Lodging Trust Incorporated (FCH) today announced that it has agreed to sell the 370-room Embassy Suites – New Orleans-Convention Center and the 296-room Embassy Suites – Nashville-Airport for an aggregate purchase price of $70 million. The purchaser has paid a $2.1 million hard money deposit toward the purchase price. The transaction is expected to close in October.

FelCor expects to use a portion of the proceeds to pay the remaining $37.7 million of accrued preferred dividends when the company pays its regular quarterly preferred dividends on October 31, 2012.

As part of FelCor’s long-term portfolio repositioning strategy, the company is selling 39 non-strategic hotels. After selling the two hotels discussed above, FelCor will have sold 18 of the 25 hotels that it has brought to market since December 2010. The company continues to make significant progress using asset sale proceeds to strengthen its balance sheet.

About FelCor

FelCor, a real estate investment trust, owns 69 primarily upper-upscale, full-service hotels that are located in major and resort markets throughout 22 states. FelCor partners with leading hotel companies to operate its diversified portfolio of hotels, which are flagged under globally recognized names such as Doubletree®, Embassy Suites®, Fairmont®, Hilton®, Marriott®, Renaissance®, Sheraton®, Westin® and Holiday Inn®, and premier independent hotels in New York. Additional information can be found on the Company's Web site at www.felcor.com.

With the exception of historical information, the matters discussed in this news release include “forward-looking statements” within the meaning of the federal securities laws that are qualified by cautionary statements herein and in FelCor’s filings with the Securities and Exchange Commission. We undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.



Contact:
FelCor Lodging Trust Incorporated
Stephen A. Schafer, 972-444-4912 begin_of_the_skype_highlighting FREE 972-444-4912 end_of_the_skype_highlighting
Vice President Strategic Planning & Investor Relations
[e-mail]

[56Chevy]

http://video.cnbc.com/gallery/?video=3000119620#eyJ2aWQiOiIzMDAwMTIwMTQwIiwiZW5jVmlkIjoicVRFb3JLblZhM2xRbVhDVzN0eC9IZz09IiwidlRhYiI6ImluZm8iLCJ2UGFnZSI6IiIsImdOYXYiOlsiwqBMYXRlc3QgVmlkZW8iXSwiZ1NlY3QiOiJBTEwiLCJnUGFnZSI6IjYiLCJzeW0iOiIiLCJzZWFyY2giOiIifQ==

[vpagano]

Marriot International reported earnings yesterday and a few comments are pretty positive and relative to our situation here.


http://www.bloomberg.com/news/2012-10-03/marriott-has-profit-as-timeshare-costs-go-unrepeated.html?cmpid=yhoo

Marriott Beats Estimates as High-End Hotel Demand Climbs

...the largest publicly traded U.S. hotel chain, reported earnings that beat estimates after demand for high-end brands increased and costs from a spun-off timeshare business went unrepeated.

Net income totaled $143 million, or 44 cents a share, compared with a loss of $179 million, or 52 cents, a year earlier, the Bethesda, Maryland-based company said today in a statement. The year-earlier results included $324 million of pretax impairment costs at Marriott’s timeshare business, which was spun off in November 2011. Earnings were higher than the 40- cent average estimate of 13 analysts in a Bloomberg survey.

The results were buoyed by demand for Marriott’s high-end hotels in the U.S., including its luxury Ritz-Carlton brand, Patrick Scholes, a hospitality-industry analyst at research firm Suntrust Robinson Humphrey Inc. in New York, said before results were announced. Revenue per available room at Marriott’s full- service and luxury hotels climbed 6.8 percent in North America, more than the 6.3 percent revpar increase for all hotels in the region.

“Pricing power continued to improve in the quarter as hotel occupancy levels approached prior peaks,” Arne Sorenson, Marriott’s president and chief executive officer, said in the statement.

Comparable revpar rose 5 percent outside North America. The hotelier in July cut its growth forecast for international revpar to 5 percent to 7 percent for this year, down from an April forecast of 6 percent to 8 percent. Worldwide, revpar grew 6 percent in the third quarter.

2013 Forecast
Marriott expects worldwide revpar next year “to increase at a mid-single-digit rate despite moderate economic growth in many markets around the world,” Sorenson said in today’s statement. He said he is “particularly bullish” about North America, where revpar probably will rise 5 percent to 7 percent in 2013.

For the fourth quarter, the company today forecast earnings of 52 cents to 56 cents a share. Marriott said it expects investment spending to total $850 million and $950 million this year, including about $100 million for maintenance capital spending.

Marriott’s third-quarter revenue climbed to $2.73 billion from an adjusted $2.52 billion, which excludes results from the timeshare business.

The company said it bought back 9.6 million shares of common stock in the third quarter for $353 million.

Marriott released its results after the close of regular U.S. trading. Its shares rose 1 percent to $39 today. They have gained 34 percent this year.

Starwood Hotels & Resorts Worldwide Inc. (HOT), owner of the luxury St. Regis and W brands, is scheduled to report its third- quarter earnings on Oct. 25.

To contact the reporter on this story: Nadja Brandt in Los Angeles at [e-mail]

To contact the editor responsible for this story: Kara Wetzel at [e-mail]

[ChuckD-MSB]

Contacting IR would probably be your best bet, but from what I have heard they are pretty tight lipped.

For the rest of you guys, here is the reply from me you referred to, this is from a friend who first got me involved with EHPTP

A good read,

As you know I have been researching the resale value. The first thing you should know it the market for quality hotels is very strong, especially in high traveled areas. Pricing in areas like L.A., San Francisco and New York are trading at a plus to the values before the markets shake up.

Cheap hotels are also being sought but at discounts which are surprisingly low to market values. There was some slippage in values to be sure but most of it is not in value as it is in financing opportunities. There are some avenues for financing of new acquisition but they appear to be impaired for refi's to a great extent.

Here the Eagle owners are on the hook for close to the market value, and as Commercial loans have historically wanted a 30% equity position this is keeping the door closed. Time is Eagles only enemy right now.

The Hotel market is actually starting to really heat up across the world from my research and demand is starting to outpace supply very quickly. Narrow that field by only looking and the upper class, and make no mistake, in Brand, Buildings and Operating revenues, these are at the very top as this report says!

Well that makes these worth paying up for.

IMHO we are going to see Blackstone accept about $540 Million if it is done this year, and $550 if not until mid next year. I don't see them playing this hand beyond that...

The principal is also being paid down month over month.

The high end of commercial investing will go 7.5 times the total annual revenue. This is a high of $937 Million and arguably what Apollo and their buds used to buy this,

As this assessment you sent it is currently averaging 4.86 or $608 Million I have to disagree only a bit with that, I think the buyers in today's markets are getting antsy. They waited for 4 or more years on the side now for a major devaluation that never came and as of my most recent hotel / motel magazine reading it is fast slipping away with any discount at all. And these are premium hotels at the top of the heap! and at the top of the shoppers list from what I have read in the trade mags (Hotel / Motel and Commercial Real Estate Investing Mags) ....

I think we will see someone step in with a bid of about 5.75 times the current revenue with them assuming room occupancy can improve at least 15% with market recovery. (And it will!)

That puts the sale value at $720 Million. Now keep in mind that the company has said over and over again it was reserving capital for acquisition or financial cushion. If they have averaged a profit of $45 Million a year as reported and "I found recorded" a year ago in their own internal reports to Apollo FundV investors , how much would that be? Also they have reportedly invested "With $77MM spent over the past four years on capital expenditures," hotel improvements I suspect they are holding about $60 to $80 million in the books. Remember they could not distribute any money without paying us first.

I see a total value of cash and sale could easily be $800 Million before payouts.

So I think is may be a bit more like this;

With 4MM preferred shares outstanding, this is the valuation walk I get:
Hotel Sale Proceeds $720,000,000
Transaction Expenses (3% of Proceeds) -$21,600,000
Net Proceeds $698,400,000

Par Value of Debt $600,000,000 (This has been paid down some and missed by this assessment)
Discount 10%
Debt Repayment $540,000,000

Net Proceeds $158,400,000

2012 NOI YTD $33,750,000
Less: Interest Expense -$15,000,000
Less: Cap Ex -$5,000,000
Available Cash from 2012 Operations $13,750,000
Total Available for Preferred $172,150,000
Units Outstanding 4,000,000
Recovery per Unit ($43.03 Exceeds Need) $25.00 FULL RECOVERY PLUS INTEREST (Correct me if I am wrong $8.76 Interest)

I would expect a payout of $33.76, if we get anything less the common / Apollo group gets none!

Should this assessment you sent be more accurate, it does not reflect the reserve of $$$???. That alone would add another $20.00 to Preferred available funds. Lets say I am way off and they only held on to say $30 Million in reserve, first, where did the other $70 to $80 Million in earnings go over the last 4 years??

Second, even that would add another $7.50 to the $18.20 this report finds. ($25.70)

I think this settles more like $25.70 to Full recovery of $33.76!

[vpagano]

Yeah, I just saw that posted right before getting your reply on IHUB.

On my to-do list as I catch up to you guys on the step by step recovery valuation for Eagle is a sheet including info from my email and your reply with variables to see the results. Right off the bat I can tell the dollar amount is highly sensitive to many of them with only 4 MM shares outstanding. Should be interesting that's for sure.

Side note: what's the best way to get a copy of financials if you are a shareholder? Just the number I saw before for IR? Thanks.

[ChuckD-MSB]

http://seekingalpha.com/instablog/4942951-grizzly-bear/1114031-why-eagle-preferred-shares-could-triple

[ChuckD-MSB]

I would love to see it [e-mail]

[vpagano]

EI, Chuck, Chevy:

I have a quick write-up from a hedge fund posted to a paid subscription online regarding an Eagle valuation. I was wondering if I could send you guys it for your thoughts. I do have a very small starter position for some skin in the game.

Chevy I have your email of course, so I could just send you it to disseminate to the others, or you guys can just DM your email address.

Have a great weekend guys!

-Pagz

[Enterprising Investor]

EHPTP Fails to Declare Second Quarter Dividend (9/17/12)

Purchase, NY (September 17, 2012) - Eagle Hospitality Properties Trust, Inc. today announced that it will not declare a third quarter 2012 dividend with respect to the 8.25% Series A Cumulative Redeemable Preferred Shares in accordance with its financing documents.

Please refer to the Articles of Incorporation of Eagle Hospitality Properties Trust, Inc. (f/k/a AP AIMCAP Corporation) and Articles Supplementary of Eagle Hospitality Properties Trust, Inc. (f/k/a AP AIMCAP Corporation) for a description of the 8.25% Series A Cumulative Redeemable Preferred Shares.

Certain information relating to the 8.25% Series A Cumulative Redeemable Preferred Shares can be found on the company's website at www.eaglehospitality.com.

CONTACT: Eagle Hospitality Properties Trust, Inc.
Patti Hawkins, Investor Relations, [phone]

http://www.eaglehospitality.com/

[Enterprising Investor]

(9/17/12)


Purchase, NY (September 17, 2012) - Eagle Hospitality Properties Trust, Inc. today announced that it will not declare a third quarter 2012 dividend with respect to the 8.25% Series A Cumulative Redeemable Preferred Shares in accordance with its financing documents.

Please refer to the Articles of Incorporation of Eagle Hospitality Properties Trust, Inc. (f/k/a AP AIMCAP Corporation) and Articles Supplementary of Eagle Hospitality Properties Trust, Inc. (f/k/a AP AIMCAP Corporation) for a description of the 8.25% Series A Cumulative Redeemable Preferred Shares.

Certain information relating to the 8.25% Series A Cumulative Redeemable Preferred Shares can be found on the company's website at www.eaglehospitality.com.

CONTACT: Eagle Hospitality Properties Trust, Inc.
Patti Hawkins, Investor Relations, [phone]

http://www.eaglehospitality.com/

[Enterprising Investor]

Hotel Construction Sees Comeback in U.S. (9/19/12)

By KRIS HUDSON
U.S. hotel construction, which dropped sharply during the economic downturn, has staged a modest turnaround, buoyed by building booms in New York as well as in small towns crowded with workers drilling oil-shale formations.

In the past four quarters, construction starts for U.S. hotels are up 32% by room count from the same period a year ago, and new-project announcements are up 22%, according to Lodging Econometrics, which tracks the hotel industry globally. Fueling the construction rebound are rising occupancy and room rates at U.S. hotels since 2009 and a willingness by more lenders to make hotel-construction loans, typically the most volatile and risky of commercial real-estate classes.

The average U.S. room rate of $105.53 in the first seven months of this year marks a 6.6% increase from the same period in 2009, according to Smith Travel Research. Average occupancy increased in the same span by nearly seven percentage points to 62.3%.

The pickup in hotel construction is a mixed signal for the industry. Although it is viewed as a sign that developers are confident about the economy's prospects and about consumers' willingness to travel, some owners of existing hotels worry that too many new hotels can lead to lower room rates in the future.

But so far, analysts say the new construction cycle isn't likely to lead to an oversupply of rooms, coming after nearly three years of declines in construction. At the end of the second quarter, developers had 474 hotels, totaling 60,000 rooms, under construction in the U.S. That is up from 437 hotels and nearly 55,000 rooms in the previous year. New-project announcements in the past year totaled 1,180 hotels, up from 926 in the previous year.

"Very modestly and very quietly, a new [construction] cycle has begun," said Patrick Ford, president of Lodging Econometrics. The company predicts a steady rise in new hotel openings through 2014.

New York remains by far the most-active market for hotel construction with 7,248 rooms being built, amounting to roughly 11% of the national total. Though the city's room count grew 7% in 2010 and 2.3% last year, its occupancy has remained above 80% since 2010. "New development is not catching up with the increase in demand," said Issac Hera, chief executive of Brack Capital Real Estate USA, which is developing three hotels in Manhattan.

A similar hotel boom is unfolding in a far different locale: rural communities atop oil-shale formations being drilled for oil and natural gas. Of the top 10 U.S. markets for hotel construction in the past year, three are in oil-shale areas: North Dakota, with 2,088 rooms under construction; the greater Corpus Christi area in Texas, with 1,491 rooms; and rural Oklahoma, with 1,242 rooms.

Most developers in these smaller markets are building budget and midscale hotels to accommodate oil-shale workers and other energy-industry employee. The hotels are needed in these areas to house the many workers, from engineers to rig workers, needed to drill and complete wells across the region. Since those workforces move around often to different drill sites, companies prefer to house them in hotels rather than longer-term residences such as houses or apartments.

Braxton Development, based in Bozeman, Mont., built Microtel Inns in the small North Dakota towns of Williston and Dickinson last year and opened a Hampton Inn in Williston last August. "When we first started, we were the second hotel in Williston to get built," Braxton principal Jon Braxton said. "But more competition came along quickly. It's as crazy as ever. Hotels still are running fairly full."

However, some hoteliers worry that the hotel-construction booms in markets like North Dakota amount to a bubble set to pop, especially if federal regulation cools the drilling industry or if gas and oil prices decline sharply. Lamont Cos., based in Aberdeen, S.D., recently built a Hampton Inn in Dickinson, N.D., and the builder also is planning a Candlewood Suites in the town.

Yet Jeff Lamont, president and chief executive, said he would sell the properties if the right offer surfaces. "I know of six or seven hotels going up in Dickinson," he said. "It has us a little nervous about what might happen with the occupancy once all of these hotels are built. To me, it seems like there might not be enough demand there for all of them."

Overall, two-thirds of new hotels under construction in the U.S. are either upscale or upper midscale, according to Lodging Econometrics. And many of those are limited-service properties, meaning they don't include restaurants or other amenities found in full-service hotels.

Developers and lenders tend to favor those types of hotels because they are more profitable than full-service hotels with restaurants. They also can be built on smaller sites and tend to hit their stride with occupancy and rate more quickly after they open.

The construction boom is made possible by the availability of construction loans, which dried up during the economic downturn but are now starting to flow again. Joe Hoesley, vice president of commercial real estate for U.S. Bancorp USB +0.53%in Minneapolis, said underwriting criteria remain fairly stringent for hotels.

Hotel owner and developer White Lodging Services Corp. has six hotels under construction in five states. Deano Yiankes, president and chief executive of White Lodging's investments and developments division, said that construction loans are "available at terms that are starting to get into the realm of doable again" for credit-worthy companies

http://professional.wsj.com/article/SB40000872396390444772804577621842373381510.html

[ChuckD-MSB]

Eagle to sell portfolio and pay off Blackstone

REPORT FROM THE U.S.—After approximately five years of financing difficulties, Eagle Hospitality Properties Trust agreed Monday to sell its 13-property portfolio to avoid foreclosure from its lender, the Blackstone Group.

Eagle Hospitality, formerly a publicly-traded real-estate investment trust, agreed to be taken private by Area Property Partners for $700 million in 2007.

After taking financing from Bear Stearns, one of the first banks to go belly up during the downturn, the debt was taken over by J.P Morgan. In that transaction, however, the debt was put into facilities owned by the New York state.

“In advance of the final maturity of September 2012, when the debt matured, the borrower decided to put the debt out to market and sell it in a full auction process,” said Brian Kim, managing director of real estate at Blackstone.

In May, Blackstone acquired debt from Eagle’s portfolio that consists of eight Embassy Suite properties, two Marriott properties, two Hilton properties and one Hyatt property.

“Our view is that the assets did not cover the debt balance,” Kim said. And because there was no equity value, executives of Blackstone thought Eagle should have let the company foreclose on the properties and hand over the keys.

Because the companies had a good relationship, they were able to reach an agreement. “What we decided to do is to give them a (chance to) basically market all of the properties for sale at a minimum price that we would be able to get paid out for a slightly discounted par,” Kim said.



“We basically gave them a price that we were indifferent about between the two outcomes,” Kim said. “If we got taken out at the price, we’d make a very attractive return … Alternatively, we could basically take the assets and do what we do, which is fix problems.”

Marc Beilinson, chief restructuring officer for Eagle Hospitality, said the company has received a number of responses from potential buyers so far. “There are a number of private-equity firms and public and private REITS that are … interested.”

Local buyers, too, have expressed interest in acquiring single properties or a group of hotels within the portfolio.

Eagle is in the process of evaluating if selling the properties on an individual basis or as a portfolio would be best for the company.

Executives also have not yet set a deadline for the portfolio sale, Beilinson said. “We’re reevaluating that all the time.”

“Ultimately, they need to hit a certain price by a certain date, meaning we need to have cash in our pocket by a certain date,” Blackstone’s Kim said.

The deal with Eagle Hospitality, he said, was done through Blackstone Real Estate Partners VII, a global opportunity fund. “We are very close to concluding our fundraising, which will result in a fund between $13 (billion) and $14 billion.”

Future of Eagle Hospitality
Some uncertainty remains regarding what will happen with Eagle Hospitality once its 13 hotels, which comprise 3,538 rooms, are sold.

If any assets remain in the company's portfolio after paying the debt, “there is an opportunity to recapitalize the REIT around certain remaining assets and continue as a REIT,” Beilinson said. “Once we know what the proceeds are, we will either be recapitalizing or distributing to shareholders.”

http://www.hotelnewsnow.com/Articles.aspx/8955/Eagle-to-sell-portfolio-and-pay-off-Blackstone

[Enterprising Investor]

Blackstone equity appears to be $115 to $118 million.

The purchase price was between $465 to $468 million, depending on which source is accurate. JPM provided $350 in financing.

Blackstone will generate returns on this deal in at least two ways: net interest income and a capital gain. Since Eagle will be "paying off Blackstone at a meaningful discount”, the capital gain will be capped.

There would be a third but limited way - buying shares EHPTP.

Once the loans have been repaid, the discount would flow to equityholders as a gain on extinguishment of debt.

[Enterprising Investor]

JP Morgan Backs Hotel Play by Blackstone (6/08/12)

J.P. Morgan has agreed to provide a $350 million floating-rate loan to finance Blackstone’s purchase of a mortgage on 13 high-quality but overleveraged hotels that it is angling to seize.

An AREA Property partnership acquired the 3,540-room portfolio in 2007 via its $700 million buyout of Eagle Hospitality, a REIT in Covington, Ky. It financed the top-of-the-market purchase with $639 million of debt from Bear Stearns.

But the hotels’ value plummeted during the downturn. Despite some recovery in recent years, it remains well below the current loan balance of $607.1 million. While the properties generate enough revenue to cover payments on the floating-rate mortgage, thanks to the historically low Libor rate, the AREA partnership is unlikely to be able to refinance when the debt matures in September. That would open the door for Blackstone to foreclose.

New York-based AREA and its partners — JF Capital Advisors of New York and Aimbridge Hospitality of Plano, Texas — have said they are exploring their options, including the possibility of restructuring the debt. Blackstone, perhaps the most-aggressive buyer of distressed debt, has a track record of working out settlements with owners.

Blackstone has agreed to pay $468 million for the Eagle loan, or a 23% discount to the face amount. The seller, advised by Eastdil Secured, was the Federal Reserve Bank of New York, which assumed the debt in 2008 when it arranged J.P. Morgan’s takeover of Bear.

Bear carved the Eagle loan into a $370 million senior piece and five mezzanine tranches. The investment bank intended to securitize the senior portion, but was caught short when the debt market seized up.

The AREA partnership this year sought unsuccessfully to negotiate with the New York Fed for a discounted payoff of the junior portion and an extension of the maturity date for the senior debt.

The properties are full- or select-service hotels branded as Embassy Suites, Hilton, Hyatt or Marriott. They are in Kentucky, Ohio, California, Massachusetts, Colorado, Florida, Illinois, New York and Puerto Rico.

http://www.cmalert.com/headlines.php?hid=157887