PHOENIX-As part of a strategy to raise $500 million, Starwood Hotels & Resorts Worldwide Inc. has earmarked a group of individual hotels--including a few trophy properties--for possible disposition.
"This is the first stage of a multi-stage disposition of assets," says Ted Darnall, president of the real estate group at Starwood, in an exclusive interview with GlobeSt.com at the Lodging Conference 2004 at the Arizona Biltmore. Though Darnall declined to name the specific properties set to go on the market, he did say the White Plains, NY-based hotelier was seeking to shed smaller assets in secondary or suburban US locations that "don't fit our current ownership profile of urban assets and destination resorts." In addition, Starwood has identified a few luxury hotels in the US and abroad for potential sale--"irreplaceable real estate" in the hotelier's eyes.
"We are looking to take advantage of the different types of buyers that are out there" in today's market, Darnall explains. This particular group of assets should appeal to those buyers seeking individual properties, investors looking for portfolio acquisitions as well as high-net worth individuals seeking to preserve wealth, the executive says.
In terms of pricing, Darnall says "we are looking for cap rates that are proportionate to the value of this real estate." Starwood's plan to pare down its ownership portfolio was announced by executive chairman Barry Sternlicht during a July earnings call. The goal, company officials say, is to reach the $500-million mark, rather than to sell off a specific number of assets. Proceeds from the dispositions will be used to pay down the company's debt load.
"We will be announcing the next stages of the disposition within the next couple of months and expect to achieve our goal by mid-2005," Darnall adds.
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