Acquisition Services
We have underwritten the acquisition of several thousand hotels throughout the US, Caribbean, Mexico and Europe.
Whether you need an objective assessment of your team’s underwriting, or a full independent market study, we apply our Core Principles to the assignment. When due diligence time is constrained, we can review the market research, brand & product strategies already in hand and raise any concerns we have. When time permits, we always recommend an objective full market study based on our own primary research.
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Our “Red, Yellow, Green” reviews are meant to add objectivity to the acquisition underwriting. We will be the only participants with no vested interest in the deal, and in that role, we will look at the materials assembled or prepared by the client’s team and ask lots of questions. These questions are not accusatory or negative... they are there to assure that the underwriting has been thorough, that options have been considered, that projections are well-founded and that the risks have been assessed. Our goal is to identify any apparent miscues, questionable assumptions or biased reasoning and to challenge any found, resulting in a Fact-Based underwriting.
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Our Full Market Studies involve a combination of quantitative data plus primary research in the form of product evaluation of the subject hotel and its competitors, interviews with management of those competitive hotels, and discussions with demand generators and others who have their hands on the pulse of the local market. Our work includes a structured evaluation of the current product compared to competition and of the buyer’s vision for product, management, brand or other changes. This assessment also underlies a rationale for projections of potential market share for occupancy, ADR & RevPAR.
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With this information in hand from our primary and secondary research we prepare projections of revenue, expenses and EBITDA for the initial five years or review those prepared by the buyer and present our independent, objective assessment of those projections.
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If a brand or operator Property Improvement Plan (PIP) has been prepared, we review it based on our evaluation of the competitive market and suggest options as appropriate. We also have the experience and resources to evaluate the order-of-magnitude costs of these alternatives along with resulting ROI projections.
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Our reports are concise and usually consist of Powerpoint® presentations that can be easily shared with internal Investment Committees, Boards, as well as lenders and potential investors.
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When our research leads us to conclude that the project economics are unlikely to be supported by the market, we suspend work and discuss next steps with the client including possible alternative strategies for the property. We stringently follow our standards of objectivity and independence, but once we have concluded that the project is viable and risks are reasonable, we are pleased to become advocates for the acquisition in communications with other stakeholders.