As part of its asset-light strategy, leading hotelier
Starwood Hotels & Resorts Worldwide Inc.
) recently divested two properties - The Westin San Francisco
Airport and Aloft San Francisco Airport - in San Francisco,
Calif. to Ultima Hospitality for about $125 million. Post sale,
the properties will continue to operate under Starwood's Westin
and Aloft brands.
The 397 luxurious rooms of Westin San Francisco Airport hotel
will undergo a complete renovation following the sale. Aloft San
Francisco Airport was unveiled in late 2012 and underwent
extensive makeover prior to its sale. Both the properties are
located near the San Francisco International Airport and are
close to several Fortune 500 companies.
Asset disposition remains a bright spot for the company. Since
late 2010, transition to an 'asset light' business model has
gained momentum in the hotels and REIT industry. Many other
hoteliers such as
Red Lion Hotels Corporation
Morgans Hotel Group Co.
) have embarked on this strategy.
Asset sale remains a long-term strategy of Starwood for
greater financial flexibility, which would help it grow through
management and licensing arrangements instead of direct ownership
of real estate. The company plans to deploy its capital to
transform its owned assets into lucrative acquisition targets. In
the last four years ended 2012, it has earned $1 billion in cash
through the sale of owned assets and strives to generate around
$3 billion in hotel sales by 2016.
In the last two years, Starwood offloaded properties like W
New Orleans, St. Regis Aspen, the Westin Gaslamp (San Diego), W
City Center (Chicago) and the Boston Park Plaza. Management
indicates an increase in buyers' interests, which, coupled with
improving lodging industry fundamentals, will lead to future
Starwood holds a Zacks Rank #2 (Buy). Another hotelier
currently performing well is
Choice Hotels International Inc.
) carrying a Zacks Rank #2.
CHOICE HTL INTL (CHH): Free Stock Analysis
STARWOOD HOTELS (HOT): Free Stock Analysis
MORGANS HOTEL (MHGC): Get Free Report
RED LION HOTELS (RLH): Get Free Report
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