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Commercial Real Estate, Hotels and Financing

Crown, Partners Drop $475M Option, Let Go $70M. Nevada: “With one month left to pull the trigger — and having made an estimated $70 million in non-refundable payments — Crown Ltd. of Australia… a group of investors has dropped their option to acquire 27-acres on the Las Vegas Strip from Archon Corp. for $475M. [Crown will] write off its $42 million investment in the project and the partnership, LVTI LLC, in which it had a 37.5% interest... Archon cited the partnership's failure to make a $2.86-million "carry option payment" that was due Monday, June 2, as the reason for the termination.” (Globe St., June 4th)

Vornado Scales Back MSG Redevelopment Plans. “Vornado Realty Trust (NYSE:VNO) has revealed plans to redevelop Madison Square Garden and the Hotel Pennsylvania on a smaller scale than what was initially expected. Initially, Vornado planned massive redevelopments in the Pennsylvania Plaza district, including a tower for Merrill Lynch headquarters, moving Madison Square Garden and developing its 5 million-sf of air space. However, lack of government approval and the tightening credit market have dashed these plans for the time being. Merrill Lynch was forced to pull out of the tower project when their weakening financial position prevented the firm from obtaining credit to obtain financing.” (Commercial Property News, June 4th)

Hoteliers Warn Of Credit Crunch. “The credit crisis could get worse, making it a tough time to take advantage of good investment opportunities, hotel mogul Barry Sternlicht said at yesterday's 30th annual NYU International Hospitality Industry Investment Conference at the Waldorf-Astoria. Donald Trump also advised investors to start buying real estate, something he has advised against for years.” (The Real Deal, June 4th)

W Hotel & Residences in Austin Bags $165M Loan. “Stratus Properties Inc. and the Canyon-Johnson Urban Fund have obtained a $165 million construction loan for a new development in Austin, W Austin Hotel & Residences. The $295 million mixed-use project, located in Downtown Austin… is seeking LEED certification and is slated for completion in early 2011. The construction loan is from Corus Bank. Though the market for condos has declined nationwide… the W project is nevertheless selling. In the six months since the project was announced, about 40% of the project's residential units have been put under contract, with another 20% in the process of being converted to contract.” (Commercial Property News, June 4th)

Harbor Point Receives Approvals for Redevelopment of Stamford's South End. Stamford, Connecticut: “Harbor Point Development L.L.C. [has] received approval from Stamford's Board of Representatives for financing of infrastructure improvements and approval from the Zoning Board for buildings and open space plans for Phase I of its transformation of Stamford's South End… The project… comprising approximately 1 million-sf of development, will transform a long dormant section of Stamford's industrial past into a mixed-use development consisting of a waterfront hotel, new residential, office and retail space, and 11 acres of public parks. Office and retail space will be ready for occupancy in 18 months with condominiums following shortly thereafter.” (Commercial Property News, June 4th)

Wyndham Booked For $150 Million Hotel Purchase. “Wyndham Worldwide, the New Jersey-based hotel operator, agreed to purchase Global Hyatt's Microtel Inns & Suites and Hawthorn Suites hotel brands to add 5% more rooms to its chains. Wyndham, the franchiser of the Ramada and Super 8 brands, will pay about $150 million for the Hyatt unit, U.S. Franchise Systems, which owns Microtel and Hawthorn, according to people involved in the transaction… The company will add more than 29,000 rooms to its 6,550 franchised hotels and about 551,000 hotel rooms worldwide, Wyndham said. The purchase may be completed in the next 60 days.” (NJ Star Ledger, June 4th)

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