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Briefs: ESA fight escalates | Premier Inn looks for bounce

Machine recaps Hollywood portfolio: New York-based Machine Investment Group has announced the US$208 million recapitalization of a hospitality portfolio located in Hollywood, California.?The portfolio, which is under construction, includes the Thompson and Tommie branded hotels and event and food and beverage spaces in the Citizen News Building.?The loan moves the previous senior mortgage held by Calmwater Capital to a US$136 million A-note and incorporates a US$72 million B-note originated by Machine. A joint venture sponsored by affiliates of Machine Investment Group and Taconic Capital provided the B-note.

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Tarsaida fights ESA sale: Asset manager Tarsadia Capital has filed a preliminary proxy statement to solicit votes against the previously announced acquisition of Extended Stay America, including its subsidiary, ESH Hospitality, the U.S.-based hotel REIT, by The Blackstone Group and Starwood Capital Group. Tarsadia is a large shareholder in Extended Stay America with an approx. 3.9% stake in the company. Tarsadia said that two of ESH Hospitality’s directors voted against the merger, insisting that their opposition be disclosed to shareholders. It also agrees with the directors, saying that now is the wrong time to sell the entities and that the merger price is “insufficient.” Additionally, Tarsadia said that the boards of Extended Stay and ESH Hospitality relied on a flawed fairness opinion and that both boards have failed to review all potential strategic alternatives for the companies.

Premier Inn owner braces for UK holiday boom: Premier Inn owner Whitbread has said it expects strong demand for holidays in the UK throughout the summer as COVID restrictions ease further from mid-May. The hotel and restaurant firm forecasts “a significant bounce in leisure demand in our tourist locations.” At the same time, Whitbread laid bare the impact of the pandemic on its business as annual losses reached £1 billion (US$1.4 billion) and sales tumbled by more than 70%. It revealed that it had benefitted from £270 million worth of government support during coronavirus. Whitbread, which also owns the Beefeater and Brewers Fayre restaurant chains, said almost all of its 800 UK and Ireland hotels, some 92%, were now open. This compares with just 39 that were opened during the first lockdown when they were used to provide accommodation for essential workers.

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Red Sea ‘Green Finance’ loan: The Red Sea Development Co. has closed a SAR 14.120 billion (US$3.76 billion) term loan facility and first ever Riyal-denominated Green Finance credit facility with four Saudi banks for its Red Sea Project. Green Financing accreditation was awarded due to Red Sea’s “market leading approach to social and environmental sustainability and the Red Sea Project’s international recognition as a green project.” The financing is the first Riyal-denominated credit facility to receive Green Financing accreditation. Upon completion in 2030, The Red Sea Project will comprise 50 resorts, with 8,000 hotel rooms and more than 1,000 residential properties across 22 islands and six inland sites.

Crowdfunding platform eyes 8 projects: The crowdfunded Mexican real estate company Monific will invest 150 million pesos (US$7.5 million) in eight new hotel projects this year. Potential locations include Tulum and Cozumel in Quintana Roo, San Miguel de Allende, Guanajuato, and Puerto Escondido, Oaxaca. The company’s investor base reached 10,000 in recent weeks, and representatives say they feel confident to bet on increasing their investor base further.

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Two Silicon Valley hotels head for foreclosure: Two Silicon Valley hotels are headed for the auction block and foreclosure, fresh evidence that economic ailments unleashed by the coronavirus still sicken the hospitality industry. The lender that holds the mortgage on the hotels, one in Sunnyvale and one in Mountain View, has scheduled a public auction for the two properties, which would be a prelude to a loan foreclosure and seizure, according to property documents filed on April 20. The property owners of the Hotel Avante in Mountain View and the Wild Palms Hotel in Sunnyvale, defaulted in October 2020 on a US$37 million loan.

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PMZ lands US$12 million loan: Boutique real estate investment banking firm PMZ Realty Capital has secured a US$12 million non-recourse loan for the Hilton Garden Inn Albany, located in Albany, Georgia. The 122-room property features an outdoor pool, fitness center, free Wi-Fi, an onsite business center, and over 9,000 square feet of meeting space separated into five meeting rooms.

CHMWarnick, Pinnacle align: Asset management and advisory services firm CHMWarnick and consultancy Pinnacle Advisory Group have formed a strategic alliance. The move leverages the two firm’s vast industry experience, while broadening the business platform. Combined, the strategic alliance immediately will service an asset management portfolio approximating 80 hotels with more than 32,000 rooms nationwide, representing virtually all segments and major brands. Beyond the US$15 billion in lodging real estate overseen as part of the asset management platform, the alliance collectively is advising owners and lenders on approximately 250 lodging projects annually, including hotel development, repositioning, management/brand selection, operations assessment, acquisition due diligence and ownership-entity accounting services. The affiliation will bring a combined professional staff of more than 50 industry experts across 13 offices.

Groups call on SBA to release relief data: A coalition of government watchdogs and labor groups appealed to the Small Business Administration (SBA) in an open letter to release data about forgiveness of Paycheck Protection Program (PPP) loans. The government has already forgiven US$194 billion in PPP loans, but has not revealed which loans were forgiven – and whether those recipients kept workers on the payroll. The PPP was created to allow companies hit by the pandemic to maintain their workforces. However, the public is still largely in the dark about whether companies used PPP funds to pay employees.

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Hong Kong, Singapore to launch ‘air travel bubble’: Hong Kong and Singapore said Monday they would launch an air travel bubble in May, months after an initial arrangement that would allow tourists to fly between both cities without having to serve quarantine was postponed.

Flights will begin from May 26. Visitors will not have to go through the quarantine as long as they fulfill the conditions of traveling within the air travel bubble. Hong Kong and Singapore had previously announced the launch of an air travel bubble in November last year but shelved the plan days before it was to start after Hong Kong saw a surge in COVID-19 infections.

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Meliá vaccinating 2,200 Punta Cana employees: Mallorca, Spain-based Meliá Hotels International, in coordination with the Department of Public Health, has begun the vaccination of its 2,200 employees in Punta Cana, Dominican Republic. On April 25, 370 employees of Paradisus Palma Real received their first dose, with the ultimate goal of 800 people vaccinated per day, with that group complete by May 5. The second and final dose of the vaccine is scheduled for May 25.

SBA officially launches US$28B restaurant fund: Established under the American Rescue Plan, and signed into law by U.S. President Joe Biden on March 11, the Restaurant Revitalization Fund, which provides a total of US$28.6 billion in direct relief funds to restaurants and other hard-hit food establishments, officially opens to applicants starting April 30. The U.S. Small Business Administration will begin registrations on April 30, and it will open applications on May 3 for the Restaurant Revitalization Fund. The online application will remain open to any eligible establishment until all funds are exhausted. 

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