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1. KHP Capital Partners closes $300 million hotel fund
Private real estate investment firm KHP Capital Partners has closed on $300 million of commitments for its sixth discretionary real estate fund, reports Costar News' Trevor Simpson. The fund has made three investments so far, and the remainder will be deployed over the next two years for a total of eight to 10 projects in major U.S. markets and select leisure destinations.
"The final closing of our sixth fund comes at the perfect time to capitalize on the lingering distress from COVID and the elevated interest rate environment," said Jeff Stulmaker, partner and chief investment officer at KHP Capital. "With our value-add strategies that focus on driving operational upside, the renovation and repositioning of under-capitalized hotels and conversion of distressed historic office buildings to hotel use, we are well-positioned to take advantage of the current environment to make compelling lifestyle hotel investments."
The fund's investments so far include the adaptive-reuse conversion of a historic office building in Charlotte, North Carolina, into a 240-key lifestyle hotel, the acquisition of the first mortgage on a lifestyle hotel in Seattle, and the purchase of the Hotel Viking in Newport, Rhode Island.
2. Florida law to allow demolition of two historic Miami Beach hotels
A state law that went into effect last year will allow for two historic hotels in Miami Beach to be demolished to make way for new development, the Miami Herald reports. The city government of Miami Beach, which has laws that prioritize historic preservation, has limited oversight under the state law.
Local developer 13th Floor Investments intends to tear down the vacant historic hotels, the Patrician and the Coral Reef, in order to build an ultra-luxury, 17-story Casa Cipriani condo, hotel and private club, the newspaper reports.
The sponsors of the state's Resiliency and Safe Structures Act have argued it promotes new development in certain coastal areas that meets modern requirements of rising sea levels. Opponents worry what it will mean for scores of historic properties across the state.
3. Cost control and revenue a focus at select-service hotels
During a panel on select-service hotels at the recent Hospitality Asset Managers Association conference, hotel executives spoke about how they're navigating the current economic and demand environment, CoStar News reports.
Kristen Townes, vice president of asset management at BRE Hotels & Resorts, said her company's focus has been to look at "what can be controlled."
“You can control your sales effort, going out and making sure they’re focused on that contribution, making sure the teams are over-penetrating and negotiating and not dropping rate,” she said. “Being very mindful it’s not a race to the bottom.”
4. American Airlines pulls full-year outlook
American Airlines has rescinded its full-year guidance due to the drop in domestic travel demand during the first quarter, the Wall Street Journal reports. The company posted a loss of $473 million during the first quarter, and revenue dropped by 0.2% to $12.55 billion.
Southwest Airlines and Delta Air Lines are among the other airlines that also withdrew their full-year outlook, the newspaper reports.
“The actions American has taken over the past several years to refresh our fleet, manage costs and strengthen our balance sheet position us well for the uncertainty our industry is facing,” American Airlines CEO Robert Isom said in the company's first-quarter earnings release.
5. US weekly jobless claims rise by 6,000
The U.S. Department of Labor reports that the seasonally adjusted initial jobless claims for the week ending April 19 rose by 6,000 to 220,000, according to a news release. The previous week's level was revised up by 1,000 to 216,000.
The four-week moving average, which helps account for some volatility, was 220,250, a decrease of 750 from the previous week.