Starwood Vends Aloft Tucson University

Starwood Hotels & Resorts Worldwide Inc. (HOT) completed the sale of Aloft Tucson University to Lightstone Value Plus Real Estate Investment Trust II, Inc. just for $19 million. Lightstone Value is a REIT managed by New York City-based The Lightstone Group.

However , as part of the deal, the hotel will continue to be under Starwood’s Aloft brand and will be managed by Island Hospitality Management under a long-term license agreement.

The hotel, built in 1972, underwent a complete renovation prior to its re-opening in Apr 2013 under the name Aloft Tucson University. Located adjacent to the University of Az campus, the hotel is also next to the University of Arizona Medical Center and the heart of the city of Tucson. Additionally , the hotel is located in a stone’s throw away from the numerous business offices, and is easily accessible from the Tucson International Airport and Interstate 10. Within our view, the upscale location of the hotel will be an added advantage.

Starwood remains committed to asset disposition in order to strengthen its financial flexibility. The company believes asset selling would help it to grow in the long term by means of management and licensing agreements rather than direct ownership of real estate.

Moreover, Starwood is focused on rebalancing its portfolio by escalating the contribution from managed plus franchised hotels. This fee-based company is less capital intensive as well as allows the company to earn the fee for managing/franchising the property.

In our view, Starwood’s strategy to divest cyclical, mature and non-core owned hotels and its transition to an ‘Asset Light’ model will be a major driver toward share price gratitude.

Proceeds from the sale for non-core owned hotels and selling or redevelopment of assets will provide Starwood with additional free money that can be reinvested into high return-on-investment projects, share repurchases and increased dividends or acquisitions. In fact , using the recent sale will likely help the organization to achieve its target of generating $3 billion from hotel sales prior to the end of 2016.

Starwood currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same industry is Marriott International, Inc. (MAR), with a Zacks Rank #2 (Buy).

Within the broader leisure services sector, Wynn Resorts Ltd. (WYNN) and Las Vegas Sands Corp. (LVS) are also worth considering. While Wynn Resorts sports a Zacks Rank #1 (Strong Buy), Las Vegas Sands has got the same Zacks Rank as Marriott.

Read the Full Research Statement on HOT
Read the Complete Research Report on LVS
Read the Full Research Report on WYNN
Read the Full Study Report on MAR

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Starwood Hotels & Resorts Worldwide Inc. (HOT) completed the sale of Aloft Tucson University to Lightstone Worth Plus Real Estate Investment Trust II, Incorporation. for $19 million. Lightstone Worth is a REIT managed by New York City-based The Lightstone Group.

However , as part of the deal, the hotel will continue to be under Starwood’s Aloft brand and will be managed by Tropical isle Hospitality Management under a long-term permit agreement.

The hotel, built in 1972, underwent a complete renovation prior to its re-opening in Interest 2013 under the name Aloft Tucson University. Located adjacent to the University associated with Arizona campus, the hotel is also in close proximity to the University of Az Medical Center and the heart of the associated with Tucson. Additionally , the hotel is located at a stone’s throw away from the many corporate offices, and is easily accessible from your Tucson International Airport and Interstate ten. In our view, the upscale place of the hotel will be an added benefit.

Starwood remains devoted to asset disposition in order to strengthen its financial flexibility. The company believes asset sale would help it to grow in the long term through management and licensing contracts instead of direct ownership of real estate.

Moreover, Starwood is focused on rebalancing its portfolio simply by increasing the contribution from handled and franchised hotels. This fee-based business is less capital extensive and also allows the company to get a fee for managing/franchising the home.

In our view, Starwood’s strategy to divest cyclical, mature plus non-core owned hotels and its transition to an ‘Asset Light’ model will be a major driver toward share cost appreciation.

Proceeds from the sale of non-core owned hotels plus sale or redevelopment of assets will provide Starwood with additional totally free cash that can be reinvested into high return-on-investment projects, share repurchases plus increased dividends or acquisitions. In fact , with the recent sale will likely help the company to achieve its target create $3 billion from hotel product sales before the end of 2016.

Starwood currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same industry is certainly Marriott International, Incorporation. (MAR), with a Zacks Rank #2 (Buy).

In the broader leisure services sector, Wynn Resorts Limited. (WYNN) and Las Vegas Sands Corp. (LVS) are also worth considering. While Wynn Resorts sports a Zacks Rank #1 (Strong Buy), Las Vegas Sands has the same Zacks Rank since Marriott.

Read the Full Study Report on HOT
Look at the Full Research Report on LVS
Read the Full Research Statement on WYNN
Read the Complete Research Report on MAR

Zacks Investment Research

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