Lodging Opportunities Group Formed to Acquire, Operate Distressed Hotels
A partnership between two high-profile real estate professionals and two hotel management companies has created a new joint venture called the Lodging Opportunities Group.
Marty Schiffman and Morris Lasky, two hotel and real estate professionals with over 70 years of combined experience owning, controlling or consulting on assets valued at more than $8 billion in aggregate, will lead the New York-based company formed to acquire and operate distressed hotels.
LOG will focus on various investment opportunities involving the purchase of undervalued hospitality properties with 150 or more rooms located in urban and suburban markets throughout the nation. The hotels could range from luxury to economy properties including Hilton, Sheraton, Marriott, Hyatt, Ramada, Holiday Inn and Comfort Inn.
All hotels that are part of LOG will be managed by Chicago-based Lodging Unlimited Inc., a sister company of LOG. The group’s western affiliate, Lodging Unlimited West in Scottsdale, Ariz., will also participate in hotel operations.
“There are a growing number of funds entering the hotel industry,” said Schiffman, president of the LOG. “We believe we are different from many of those players because they include a high percentage of financial buyers and we have a hands-on, intensive management approach to creating solutions. We will differentiate ourselves from other investors by seeking out highly challenged, deep turn-around assets that can benefit from enhanced management, investment and repositioning. We have the expertise, capital and patience to revitalize assets that more traditional funds may find too complex or encumbered.”
The LOG will purchase hotels that are compatible with the long-term attributes that Lodging Unlimited is known for in the hospitality industry, specifically the management and repositioning of hospitality facilities undergoing significant underperformance due to mismanagement, poor marketing or event-driven circumstances.
For over 40 years, LUI has provided management and consulting services for troubled hotel operations involving contract negotiations, impact and feasibility studies, litigation support, arbitration, bankruptcy, receiverships and acquisitions.
Typical investments sought by the LOG include hotels that are under the effective control of a creditor through foreclosure and are in the process of foreclosure, receivership or creditor-in-possession agreement. LOG is also seeking hotels that have filed for bankruptcy and are in need of a plan, new management and recapitalization.
LOG will also help properties that are in development with experienced construction overruns that don’t have secure full financing to continue the project as well as hotels that need additional capital to make up for debt shortfalls.
Lasky, the current president of LUI in which he has consulted on more than 300 hotels valuing in excess of $7 billion, will be the chairman of the board for the LOG.
“As we come out of this recession, there are hundreds of properties with seemingly insurmountable problems,” Lasky said. “These types of properties are our sweet spot. We have the people and systems in place to perform due diligence quickly, complete the acquisition quickly and take over a single property or portfolio in less than 24 hours.”