Stockbridge Capital Group and sbe announced Tuesday they secured $300 million in new funding for the redevelopment of the Sahara Hotel & Casino into the SLS Las Vegas.
J.P. Morgan Securities LLC raised the funds in less than two weeks, underscoring investor confidence in the project and in sbe's track record of operating successful hotel, restaurant and nightlife brands. The redevelopment is anticipated to create thousands of local jobs beginning in the next two years.
"We see the northern end of the Strip as the future of Las Vegas, and we're pleased to be positioned at the forefront of that growth," said sbe Founder, Chairman and CEO Sam Nazarian. "Las Vegas has recovered steadily in the past year, and we're excited to be able to inject capital back into the local economy through the adaptive reuse of the famed Sahara."
Once complete, SLS Las Vegas will feature a mixed-use resort and casino with more than 1,600 guest rooms and suites and a collection of sbe's restaurant and nightlife brands.
An HVS survey documenting U.S. hotel transactions in calendar year 2011 shows major sales again eclipsed levels from the year before. Mid-market hotel transactions also rose significantly.
The “HVS 2011 Survey of Major and Mid-Market U.S. Hotel Transactions” details hotel sales of $10 million and more (major) and between $3 million and $9.99 million (mid-market). The survey tracks hotel sales from 2009, 2010 and 2011, revealing market dynamics during and in the wake of the recent recession.
“Over the past two decades, the number of major hotels sold annually has topped 200 seven times,” Amy Beam, director of market data and research at HVS, said in a news release. “One of those years was 2011, and it’s even more significant that this comes after the virtual standstill of transaction activity since the recession. This sustained run of hotel sales activity over the course of most of 2010/11 is evidence that market conditions are on the upswing.”
Hotel performance might be recovering in the Middle East, but debt financing is still difficult to come by, according to panelists at the Arabian Hotel Investment Conference.
The landscape has improved in the last six to eight months but not to the desired lending level, said Anil Bhardwaj, director of A.A. Al Moosa Enterprises LLC.
“There is a total disconnect between the optimism of investors, who want to get on with building, and international and local banks here facing their own challenges,” he said. “They had too much exposure to the real-estate market, so their balance sheets ended up lopsided.”
An ADP Employer Services report released Wednesday showed companies added the fewest number of U.S. workers in seven months in April, reports Bloomberg News.
Employment increased by 119,000 following a revised 201,000 gain the prior month, according to figures from Roseland, New Jersey-based ADP. The median forecast of economists surveyed by Bloomberg News called for a 170,000 advance.
Companies might remain hesitant about expanding their workforce until they see more evidence that the gains in consumer spending, which accounts for about 70% of the economy, will be sustained. A Labor Department report in two days is projected to show that private payrolls accelerated in April, while unemployment held at 8.2%.
“Employment growth is slowing,” said David Sloan, an economist at 4Cast in New York, who projected a 125,000 gain in the ADP figure. “The economy is growing at a fairly slow pace, though it’s sustainable.”
Qatar National Hotels Company announced Tuesday it rebranded as Katara Hospitality, according to a gulfnews.com report.
The company said its decision to implement a new corporate identity reflected its international expansion plans and was in line with Qatar's 2030 plan for economic diversification.
Katara Hospitality, which counts the Raffles Hotel Singapore and Le Royal Monceau Raffles hotel in Paris among its assets, plans to move forward through a combination of organic growth and a series of mergers and acquisitions.
"Absolutely, it is the right time to look at possible mergers and acquisitions in Europe and the US," said Shaikh Nawaf Bin Jasem Bin Jaber Al Thani, chairman of Katara Hospitality, on the sidelines of the Arabian Travel Market in Dubai. "We are a cash rich company and we will be investing from that cash. After about five or six years we will start to deleverage our assets because in that time we plan to consume our capital," he added.
Compiled by Stephanie Wharton.