Lodging Enterprises Sold to AHIP for $127M

Kansas-based Lodging Enterprises has been sold to American Hotel Income Properties REIT LP (AHIP), led by Canadian hotel veteran Rob O’Neill of Vancouver, B.C., for $127 million. Jones Lang LaSalle’s Hotels & Hospitality Group arranged the sale, led by managing directors Al Calhoun and Mark Fair. Terms of the deal were not disclosed, but AHIP did note that Lodging Enterprises will continue to manage the hotels.

American Hotel Income Properties REIT, launched its initial public offering last month raising nearly $86 million. The offering was underwritten by a syndicate of underwriters co-led by Canaccord Genuity Corp. and National Bank Financial Inc., and included TD Securities Inc., BMO Nesbitt Burns Inc., CIBC World Markets Inc., Scotia Capital Inc., Dundee Securities Ltd., GMP Securities L.P., Macquarie Capital Markets Canada Ltd., Burgeonvest Bick Securities Limited and Haywood Securities Inc.

Robert O'Neill, Chief Executive Officer of AHIP, commented that, "We are excited about the initial public offering of American Hotel Income Properties REIT LP. The initial portfolio of hotel properties represents a unique and stable platform upon which we intend to further develop AHIP's considerable potential."

Lodging Enterprises owns and operates 32 proprietary branded hotels in 19 states and 24 proprietary branded diners. The sale also includes a large development pipeline of hotels under construction and long-term guaranteed room night contracts with three of the largest Class I U.S. freight railroad companies, according to a Hotels Magazine report. The hotel properties have agreements with several of the largest U.S. railroad operators, Union Pacific Corp., Burlington Northern Santa Fe LLC and CSX Corp., as well as Canadian Pacific Railway Limited, to provide lodging accommodations for railroad employees under contracts stipulating guaranteed minimum occupancies, which provide the REIT with recurring revenue, according to a CoStar report.

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Empire State Realty Trust Files $1B NYSE IPO

Empire State Realty Trust, the company that controls the landmark Empire State Building in New York City, disclosed in a Securities and Exchange Commission (SEC) filing this month that it is planning a $1 billion initial public offering (IPO) in the coming months. Empire State Realty Trust will list on the New York Stock Exchange and trade under the "ESB" ticker, according to its SEC fillings. The realty trust controls 12 properties including the Empire State Building, two Westchester County properties in downtown White Plains and Harrison, and several other locations in Connecticut. Bank of America Merrill Lynch and Goldman Sachs Group Inc. will advise on the IPO.

According to Bloomberg, Malkin Holdings LLC, which owns the Empire State Building in conjunction with the estate of Leona Helmsley, said last November that it was considering joining a new REIT. Malkin Holdings is led by Peter Malkin and his son Anthony Malkin. The move is the culmination of efforts by the Malkin family to simplify control of its sprawling real estate holdings, reported the New York Times. The IPO will allow the Malkins to convert the equity held by other investors into stock in the new company, Empire State Realty Trust.

"Because it's got an iconic building as a centerpiece, I expect it will be successful anyway, but you're going to have more or less a higher percentage" of individual investors, said Lawrence Longua, director of the REIT Center at New York University's Schack Institute of Real Estate in a Businessweek article. For institutional investors, the owners "are very recognized names in the industry, so I suspect all in all, it'll do well," he said.

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American Assets Picks Up $92M Office Portfolio

Ashforth Pacific, Inc. let go of a 593,117 square foot portfolio of office buildings this month as it sold six properties in Portland, Oregon for $92 million to San Diego-based American Assets. According to a CoStar report, the portfolio covers six office buildings within four contiguous blocks, including a condominium interest that totals 213,533 square feet in the 20-story Lloyd Tower, the 16-story Lloyd 700 Building, the 710 Oregon Square Building, the 830 Oregon Square Building, the 710 Oregon Square Building, and the Oregon Square 729 Building.

American Assets paid for the portfolio with proceeds from its IPO in January 2011. John Chamberlain, American Asset’s president and CEO, said the company is looking forward to expanding to other markets on the West Coast, including Santa Barbara and Seattle.

For more news and information visit Blumberg Capital Partners.