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Briefs: Braemer buys Mr. C | Hilton execs bullish

Braemar buys in Beverly Hills: Braemar Hotels & Resorts has entered into a definitive agreement to acquire the 138-room Mr. C Beverly Hills Hotel in Los Angeles, California, as well as five adjacent luxury condominium residences for US$77.9 million, consisting of US$65.4 million for the hotel (US$474,000 per key) and an allocated price of US$12.5 million for condos. Remington will take over hotel management post-acquisition. The acquisition will be funded with approximately US$30 million of cash (the majority of which will be used to paydown existing debt), 2.5 million Operating Partnership units, 500,000 warrants at a strike price of US$6, and a US$30 million mortgage loan. The purchase price represents, as of December 31, 2019, a trailing 12-month capitalization rate of 5% on hotel net operating income of US$3.9 million and a trailing 12-month 16.5x hotel EBITDA multiple. Braemar expects to realize a stabilized yield of over 8% on its investment in the next three to five years. “This property fits perfectly with our strategy of owning high RevPAR luxury hotels and resorts and further diversifies our portfolio,” said Braemar President and CEO Richard Stockton.

JV buys in Marbella: The 400-room H10 Andalucía Plaza hotel in Marbella, Spain, has been purchased by a joint venture including U.S. private equity firm Bain Capital Credit and Geneva, Switzerland-based real estate investor Stoneweg Hospitality for an undisclosed price. H10 will continue to manage the property until the end of this year when the hotel will undergo a major renovation. Stoneweg currently has a portfolio of 1.500 hotel rooms. Bain Capital Credit has US$44 billion in assets under management.

Hilton’s Jacobs doesn’t buy Airbnb line: Hilton CFO Kevin Jacobs, not a believer in a “new normal,” told Yahoo Finance Live last weekend that Airbnb CEO Brian Chesky is wrong about its prediction that business travel will change dramatically as the recovery continues. Jacobs, who is also president of global development for Hilton, predicted business travel should return to 70% to 75% of 2019 levels by the end of this year, adding it is currently performing at half of 2019 levels. He added that “lower-value” trips might be replaced with even more higher-value trips where more time is spent developing business.

Nassetta the bull: Hilton systemwide occupancy in the United States hit almost 93% last Saturday, a holiday weekend, according to CEO Chris Nassetta. He told CNBC on Tuesday, “We had a blockbuster weekend,” adding that summer reservations are beating peak Hilton bookings from pre-COVID levels in 2019. “I would bet a lot that when you get to ’23 and beyond that business travel and group travel in addition to the leisure business will be back where it was in 2019 and will be growing beyond that,” Nassetta said.

Travel sentiment on the rise across China: Market sentiment is improving across China, according to a new report from Horwath HTL. Its latest survey shows positive sentiment for travel are even higher than that of the second half of 2019. In particular, the sentiment scores of Hainan, Northwest, and Southwest regions, which are the domestic long-haul destinations now serving as the substitutes for the international destinations, are showing positive growth.

Download the Horwath HTL report

Ascott buys three Japan properties: Ascott Residence Trust (ART) has agreed to procure three freehold rental housing properties in central Sapporo for JPY 6.78 billion (S$85.2 million). The transactions will expand student accommodation and rental housing portfolios to around about 8% of ART’s total property value. They should be complete by end June 2021. Funding will be sourced from debt and part of the net proceeds from recent divestments. Ms Beh Siew Kim, CEO, expects demand for the properties to be “strong,” especially due to their location in Sapporo, which is a “key economic and logistics hub.”

Memorial Weekend traveller spike: Almost 1.96 million airline passengers were screened this Memorial Day weekend, according to the TSA. This is the highest number since the pandemic began 15 months ago. The spike comes amid an accelerated vaccination rollout combined with relaxed mask guidelines from the CDC.

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