2015 Hospitality Advisory Services Brochure

Hospitality & Commercial Real Estate Service, Worldwide.

HOSPITALITY ADVISORY SERVICES• INSTITUTIONAL RANGE • REGIONAL EXPERTISE • NATIONAL GEOGRAPHIC SCOPE •

I’d like to begin simply: by thanking you.

As one of our extremely valued clients, we’re sincerely grateful for the trust and confidence you’ve shown in us throughout 2014, as of course, we have been for that same trust in prior years.

We happen to think that your trust is well placed. As we welcome 2015, the national lodging market is reassuringly robust, with an expectation of continued and sustained growth over the next 2-3 years.

Close to home, New Orleans has been transformed into an Institutional Lodging Market, in large part because of rising RevPAR growth in 2010-2014, limited new supply between 2005-2014, and an economic surge in the region. This has created a higher barrier to market entry and today, over 77% of the hotels in the Central Business District are owned by public or private Institutional Lodging entities.

The nature of the city’s market has been a substantial factor in our successes, especially in the twelve months trailing since the building and buying of hotels in New Orleans reached equilibrium in 2014.

Let’s look at those successes, and the rest of the NOLA market. Our Hospitality Division closed 5 new hotel developments in the CBD – over 850 rooms totaling approximately $200,000,000 in completed transaction costs.

The 182-room Oil and Gas Building, the 110-room Moxy by Marriott, the 185-room 1111 Gravier, the 165-room Cambria Suites by Choice, and the 210-room Luxury Boutique Independent NOPSI Building. We also closed the largest single existing hotel transaction citywide in 2014: the 220-room Sheraton Four Points in the 4th quarter. Last year, Marriott chose New Orleans to launch the opening of the first AC by Marriott hotel in the US which is currently for sale (Newcrest Image) and in 2016, NOLA will also host one of the first Moxy by Marriott hotels in the country.

Other developments include the 200-room Aloft (HRI) opening in 2015, the 216-room ACE hotel, set to open 2016 and the first Hyatt House in New Orleans (180 rooms), which is being developed within an existing Class B office building on Poydras street. Northview superbly executed and completed the transformation of the Queen and Crescent hotel into an upscale lifestyle boutique property (196 rooms). This asset is a “must see” on your next trip into town. In 2014, sales of existing hotels were robust, though the velocity and volume of existing lodging product did not exceed 2013’s peak. A few significant trades and new players to the market include Garrison/Wright Staybridge (182 rooms), O’Keefe Plaza (100 rooms - conversion to HIE), and Rockwood/Warner with the acquisition of the Country Inn and Suites (155 rooms for $190,000 per room). The first hotel I developed - The Whitney Wyndham (92 rooms) - also traded to Alexander Land last year, and is being upgraded to a beautiful, independent boutique property.

New brands and owners to the market Include Chesapeake, Connor Acquisitions, Building Land and Technology (BLT), Garrison, Wright Development, Joie de Vivre (JDV), Canopy, Moxy, Baywood, Fillmore Capital, Destination/Lowe, Salamander, Summit, and Newcrest Image.

The most exciting development, though, is that the New Orleans lodging community is preparing to embrace a substantial addition to its Luxury Competitive Set with the redevelopment of the World Trade Center (WTC).

LETTER TO OUR CLIENTS:

2


Brands and buyers in the mix include NAI/Latter& Blum Chairman Bob Merrick, teamed with Woodward Interest, Carpenter and Co., teamed with Four Seasons, HRI with Andaz, by Hyatt, Darryl Berger, Roger Ogden and Joe Jaeger with Conrad by Hilton, Oxford Capital LLC, and Woodbine teamed with Valencia.

These are all mixed-use developments with dual components including a 200-350 room hotel, and “for rent/for sale” residential, fee simple residences. This is all in what is arguably the best location for mixed-use development in the city. The Le Pavilion hotel transaction has been placed on hold; we understand it is coming back to market in the 1st quarter of 2015. Currently, the management encumbered Hampton Inn Portfolio is still available for sale and the D-Day Museum is building a 200-room hotel “on site” for the 500,000 people that visit the museum annually.

The dual-branded, 365-room Marriott Residence Inn/Springhill Suites project on Canal street is in final negotiations with the city, and is expected to emerge with an acceptable compromise regarding historic buildings, height, and density. This project could very well drive further localized development.

Chesapeake recently completed their conversion of the 423-room W New Orleans to Le Meridian; and the Pontchatrain hotel traded and will become an upper-up-scale lifestyle hotel. The Doubletree is under contract and is expected to trade in the 1st Quarter of 2015. Yet more welcome news is that the $3.5 Billion BIO DISTRICT is slated to open Phase I in 2015, which will increase weekday corporate demand. Additionally, construction is now underway with the new airport terminal (to open 2018/2019), which will most assuredly improve Lift and customer service in and out of the city.

These two developments, opening back to back, coupled with HVS opening a new office in the CBD will further galvanize Institutional ownership in New Orleans. The city retains its enviable position as a “Gateway City”, with one of the county’s largest ports, a very strong convention calendar 2015-2018, and strong upward growth in the Leisure segment annually (RevPAR $130- 2014 CBD). Eyeing the future, between 2015-2019, the New Orleans lodging market should experience a healthy 1% annual increase in supply (including the 1000-room Convention Center Hotel 2019), and RevPAR (demand) growth of approximately 4.8% annually, mostly through rate escalation.

With the arrival of “for sale” residential real estate trading from $550-$800 psf in the CBD in 2014, we believe many existing potential hotel conversion opportunities will include a combination hotel and residential component; leveraging economies of scale with dual branding and use, sharing amenities and management. The Hospitality Division of NAI/Latter&Blum looks forward with relish to forging new inroads in other top 25 lodging markets both regionally and nationally in 2015. Our continued focus on our clients’ best interests will surely spearhead our ongoing successes.

As we go forward together, I’d like to again thank you for your business, continued trust and friendship.

Sincerely,Lenny Wormser

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The 220-room Sheraton Four Points represents the largest (in terms of rooms) single New Orleans hotel transaction of 2014. The seller is an Austin-based, privately-held real estate firm. The buyer is a Ft. Meyers FL. based lodging owner, with their first New Orleans property. The sale occurred during a brand conversion that will give this asset a competitive basis all in. It has a great location, just minutes from the new international airport terminal, coupled with superb access and visibility. The high barrier to entry location - due to few nearby developable sites - ensures this asset will remain at the forefront of its competitive set.

INSTITUTIONAL PROPERTY SALES

Hospitality & Commercial Real Estate Service, Worldwide.Hospitality & Commercial Real Estate Service, Worldwide.

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Located in the heart of the Arts/Central Business District, 744 St Charles Avenue is one of the first Moxy by Marriott hotels to be built in the country, with a scheduled opening in 2016. This lifestyle/boutique millennial-focused brand represents a substantial shift in Marriott’s future growth: third party management and increased yield led by a smaller but spacious room concept, in high entry barrier urban markets. With the Marriott reservation system leading the charge, the ‘chic but cheap’ Moxy New Orleans is being developed by a multi-generational New Orleans family, is fully entitled, and is expected to start construction in the 1st quarter of 2015.

LODGING DEVELOPMENT ADVISORY SERVICES


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1111 Gravier is a 105,000 square foot concrete structure formerly known as the Rault Center. The building has been vacant since the 1972 fire which precipitated the changing of the fire codes and life safety standards of high rise buildings nationwide. The buyer was thus able to obtain a ‘Historic Designation’ for the building, which substantially lowers its acquisition basis and allows for the development of the first Joie de Vivre (JDV) hotel by Commune in the city to forge ahead. Fully entitled, this project is situated adjacent to the French Quarter and Bio District, and is scheduled to open in 2016.

ADAPTIVE RE-USE AND VALUE ADDED REDEVELOPMENT


6

The Oil and Gas Building at 1100 Tulane Avenue is a 110,000 square foot historic structure situated one block from the French Quarter and adjacent to the $3.5billion Bio District (slated to open mid 2015). It is just over a five minute walk to the Convention Center and Superdome. The buyer is a Washington-based institutional private lodging developer, owner and management company and the seller is a local nonprofit organization. Slated to open in 2016, 1100 Tulane, which is currently vacant, will be converted into Baywood’s first hotel in New Orleans. Fully entitled, the property sits at the forefront of the entrance to the city’s ever-growing for-rent residential market.


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The 200,000 square foot New Orleans Public Service Building (affectionately known as the NOPSI building), has arguably the most dramatic and sensational lobby of any historic building in New Orleans. With 35 foot ceilings in the lobby, this Art Deco diamond is set to become one of the city’s largest Luxury Independent hotels, with 210 rooms. The buyer is an institutional private developer and first time New Orleans lodging owner. The seller is a successful New Orleans real estate group, who purchased the building prior to 2005, and until approached, was planning to develop the property into apartments. The site, which includes three buildings and a parking lot, is located three blocks from the French Quarter and three blocks from the Bio District. It is nestled squarely in the CBD adjacent the new Aloft, the new AC by Marriott, the Waldorf/ Roosevelt, the Marriott Renaissance FQ, the Ritz Carlton, Le Pavilion and Homewood Suites.

OFF MARKET ACQUISITIONS


8

In 2015, the fate of the city’s most desirable piece of property will be decided: the sale/lease of the World Trade Center (WTC) at 2 Canal Street. The WTC is unquestionably in the best location in New Orleans for a mixed-use project. Eleven bids were initially received and the city has narrowed the list down to five, who will submit their detailed proposals in the first Quarter of 2015. Brands and buyers in the second round include NAI Latter& Blum Chairman Bob Merrick with Woodward Interests, Carpenter and Company and Four Seasons, HRI with Andaz by Hyatt, Darryl Berger, Joe Jaeger, and Roger Ogden with Conrad by Hilton, Oxford Capital LLC, and Woodbine Development teamed with Valencia. The WTC will be a major addition to the New Orleans Luxury Competitive Set, which will combine a 200- 350 room hotel with separate residential for-rent and for-sale components. It is enviably at the apex of the Mississippi River, Convention Center, French Quarter, and CBD.

TROPHY ASSETS


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WTC LUXURY MIXED USE

MONTELEONE

DOUBLE TREE

WINDSOR COURT

PROPOSED RI/SHS

THE RITZ CARLTON

MARRIOTT RENAISSANCE

MARRIOTT AC HOTEL

HAMPTON INN & SUITES

HAMPTON INN & SUITES

CROWNE PLAZA

HYATT

CAMBRIA SUITES BY CHOICE

COUNTRY INN & SUITES

ROOSEVELT WALDORF ASTORIA

THE NOLA LODGING MARKET 2015 - 2019


10

ALOFT

ACE HOTEL

MOXY BY MARRIOTT CBD

MOXY BY MARRIOTT

1100 TULANE

HYATT HOUSENOPSI

CONVENTIONAL CENTER MIXED USE DEVELOPMENT

1111 GRAVIER

HOLIDAY INN EXPRESS


11

CONVENTION CENTER MIXED USE DEVELOPMENT

CONVENTION CENTER

CBD

ANCHOR DEVELOPMENTS 2016 - 2019

PLAZA TOWERS MIXED USE DEVELOPMENT


12

BIO DISTRICT OPENING 2015-16-17

WORLD TRADE CENTER (WTC) MIXED USEPOTENTIAL BRANDS INCLUDE:

FOUR SEASONS, CONRAD, ANDAZ, VALENCIA

FRENCH QUARTER

CONVENTION CENTER STATISTICS

Year Number of Conventions Number of Delegates2006 43 428,000

2014 128 750,000Source: Ernest N. Morial Convention Center

VISITATION STATISTICS

Year Number of Visitors Visitor Spending2006 3,700,000 $2,800,000

2014 9,300,000 $7,000,000

(2004 Peak) 10,000,000 $5,000,000

2018 (Proj) 13,000,000 TBDSource: Ernest N. Morial Convention Center

AIRPORT STATISTICS - LOUIS ARMSTRONG NEW ORLEANS

Year Passenger Traffic2006 6,200,000

2014 7,200,000

(2004 Peak) 9,700,000Source: Ernest N. Morial Convention Center


13

Magazine St

C a n a l S t r e e t F e r r y

C A J U N Q U E E N

C R E O L E Q U E E N

M I S S I SS

IP

PI

R

IV

ER

Martin Luther King Blvd

Orleans A ve

Basin StElk Pl

Loyola Ave

Howard Ave

Simon Bolivar Ave

Convent

ion

Center

Blvd

Poydras St

Religious St

Tcho

upito

ulas S

t

Andrew Higgins Dr

St. Charles AveCamp St

La Salle St

Canal St

St. Claude Ave

N Rampart St

S Robertson St

Almonaster Ave

Florida Ave

Esplan

ade A

ve

Esplanade Ave

St. B

erna

rd A

ve

N Claiborne Ave

N Robertson St

Annett

e St

Calliope St

Pontchartrain ExpyGreater New Orleans Bridge

N Claiborne Ave

Thalia St

Clara St

Magnolia St

Clio St

S Saratoga StErato St

Euterpe St

Terpsichore St


St. Charles Ave

S Rampart St

Carondelet St

Euterpe St

Erato St

Terpsichore St

Race StOrange St

Annunciation St

Perdido St

Gravier St

Freret

La Salle St

S Liberty

Loyola Ct

O’Keefe Ave

Baronne St

St. Joseph St

Union St Comm

on StLafayette St

Girod St

Camp St

Constance St

Tchoupitoulas

St

Commerc

e St

N Peters S

t

Poe D

r

Juila St

Port of

New Orle

ans P

l

Iberville St

Burgundy St

Dauphine St

Bourbon St

Royal StRoyal St

Charters St

Crozat St

Bienville Ave St. Louis StSt. Louis St

Toulouse St

St. Peter St

Orleans St

Dumaine St

St. Philip St

Governor Nicholls St

Barracks St

N Derbigny St

N Robertson St

N Villere St

Marais St

Treme St

St. Claude Ave

Kerlerec St

Columbus St

N Rampart St

Touro

St

Annette

St

Urquhart St

St. Anth

ony St

N Villere St

N Roman St

French

men St

Marigny

St

Spain

St

Music S

t

St. Roch

Ave

Cleveland Ave

Laharpe St

W Stadium Dr

Girod St

LaSalle St

N Roman St

N Prieur St

S Johnson St

Ursulines Ave

Govenor Nicholls St

Earhart Blvd

Gravier St

Dumaine St

Piety St

Desire St

Gallier St

Congress St

Independence St

Pauline St

Dauphine St

Royal St

St. Ferdinand St

Decatur St

Port St

Burgundy St

Charles St

N Rampart ST

Louisa St St. Claude Ave

Franklin Ave

St. Ann St

Gravier St

Marigny

St

Mandevi

lle St

Spain

St

Toniti St

Elysia

n Field

s Ave

N Derbigny St

RiverfrontPark

LafayetteSquare

ENERGYCENTRE

AnnunciationSquare

Louis Armstrong Park

JacksonSquare

CabriniPark

10

10

90

90

90

RIVERWALK

NEW O

RLEANS R

IVERWALK

INTE

RNATIO

NAL CRUISE S

HIP TERMIN

AL

LEECIRCLE

LOUISIANASUPERDOME

MAINPOST OFFICE

UNIONPASSENGERTERMINAL

GREYHOUNDAMTRAK

NEWORLEANS

ARENA

CITY HALL

GALLIERHALL

LOUISIANA CHILDREN’S MUSEUM

MAHALIA JACKSON THEATRE FOR THE PERFORMING ARTS

TULANE UNIVERSITYHOSPITAL AND CLINIC

PUBLIC LIBRARY

ST.LOUISCEMETRY NO. 1


ORPHEUMTHEATRE

PRESERVATIONHALL

GALLIERHOUSE

OLD URSULINECONVENT

FRENCHMARKET

ST. LOUISCATHEDRAL

CAFE DU MONDE

JAX BREWERY

PAN AMERICAN BUILDING

AUDUBON AQUARIUM OF THE AMERICAS

MORIAL CONVENTIONCENTER

ONESHELL

SQUARE

HARRAH’S

USMINT

CIVICCENTER

MOON WALK

SPANISH PLAZA

CONTEMPORARYARTS CENTER

CONFEDERATE CIVIL WARMUSEUM

ORGEN MUSEUM

TULANE UNIVERSITY

ST. PATRICKSCHURCH

3 MI

TREME

FRENCH QUARTER

FAUBOURGMARIGNY

WESTBANK

CBD

BIO DISTRICT

CONVENTIONCENTER DISTRICT


TREME

FRENCH QUARTER

LOWERGARDENDISTRICT

LOWERGARDENDISTRICT

GARDENDISTRICTGARDENDISTRICT

FAUBOURGMARIGNY

WESTBANK

CBD

BIO DISTRICT

CBD/BIO DISTRICT

1

23

4

5

6

8 9

7

10

1211

13

1415

16

17

17

17

18

CORE NEW ORLEANS LODGING MARKET


14

Magazine St

C a n a l S t r e e t F e r r y

C A J U N Q U E E N

C R E O L E Q U E E N

M I S S I SS

IP

PI

R

IV

ER


Orleans A ve

Basin StElk Pl

Loyola Ave

Howard Ave

Simon Bolivar Ave

Convent

ion

Center

Blvd

Poydras St

Religious St

Tcho

upito

ulas S

t

Andrew Higgins Dr

St. Charles AveCamp St

La Salle St

Canal St

St. Claude Ave

N Rampart St

S Robertson St

Almonaster Ave

Florida Ave

Esplan

ade A

ve

Esplanade Ave

St. B

erna

rd A

ve

N Claiborne Ave

N Robertson St

Annett

e St

Calliope St

Pontchartrain ExpyGreater New Orleans Bridge

N Claiborne Ave

Thalia St

Clara St

Magnolia St

Clio St

S Saratoga St

Erato St

Euterpe St

Terpsichore St


St. Charles Ave

S Rampart St

Carondelet St

Euterpe St

Erato St

Terpsichore St

Race StOrange St

Annunciation St

Perdido St

Gravier St

Freret

La Salle St

S Liberty

Loyola Ct

O’Keefe Ave

Baronne St

St. Joseph St

Union St Comm

on StLafayette St

Girod St

Camp St

Constance St

Tchoupitoulas

St

Commerc

e St

N Peters S

t

Poe D

r

Juila St

Port of

New Orle

ans P

l

Iberville St

Burgundy St

Dauphine St

Bourbon St

Royal StRoyal St

Charters St

Crozat St

Bienville Ave St. Louis StSt. Louis St

Toulouse St

St. Peter St

Orleans St

Dumaine St

St. Philip St

Governor Nicholls St

Barracks St

N Derbigny St

N Robertson St

N Villere St

Marais St

Treme St

St. Claude Ave

Kerlerec St

Columbus St

N Rampart St

Touro

St

Annette

StUrquhart St

St. Anth

ony St

N Villere St

N Roman St

French

men St

Marigny

St

Spain

St

Music S

t

St. Roch

Ave

Cleveland Ave

Laharpe St

W Stadium Dr

Girod St

LaSalle St

N Roman St

N Prieur St

S Johnson St

Ursulines Ave

Govenor Nicholls St

Earhart Blvd

Gravier St

Dumaine St

Piety St

Desire St

Gallier St

Congress St

Independence St

Pauline St

Dauphine St

Royal St

St. Ferdinand St

Decatur St

Port St

Burgundy St

Charles St

N Rampart ST

Louisa St St. Claude Ave

Franklin Ave

St. Ann St

Gravier St

Marigny

St

Mandevi

lle St

Spain

St

Toniti St

Elysia

n Field

s Ave

N Derbigny St

RiverfrontPark

LafayetteSquare

ENERGYCENTRE

AnnunciationSquare

Louis Armstrong Park

JacksonSquare

CabriniPark

10

10

90

90

90

RIVERWALK

NEW O

RLEANS R

IVERWALK

INTE

RNATIO

NAL CRUISE S

HIP TERMIN

AL

LEECIRCLE

LOUISIANASUPERDOME

MAINPOST OFFICE

UNIONPASSENGERTERMINAL

GREYHOUNDAMTRAK

NEWORLEANS

ARENA

CITY HALL

GALLIERHALL

LOUISIANA CHILDREN’S MUSEUM

MAHALIA JACKSON THEATRE FOR THE PERFORMING ARTS

TULANE UNIVERSITYHOSPITAL AND CLINIC

PUBLIC LIBRARY



ORPHEUMTHEATRE

PRESERVATIONHALL

GALLIERHOUSE

OLD URSULINECONVENT

FRENCHMARKET

ST. LOUISCATHEDRAL

CAFE DU MONDE

JAX BREWERY

PAN AMERICAN BUILDING

AUDUBON AQUARIUM OF THE AMERICAS

MORIAL CONVENTIONCENTER

ONESHELL

SQUARE

HARRAH’S

USMINT

CIVICCENTER

MOON WALK

SPANISH PLAZA

CONTEMPORARYARTS CENTER

CONFEDERATE CIVIL WARMUSEUM

ORGEN MUSEUM

TULANE UNIVERSITY

ST. PATRICKSCHURCH

3 MI

TREME

FRENCH QUARTER

FAUBOURGMARIGNY

WESTBANK

CBD

BIO DISTRICT



TREME

FRENCH QUARTER

LOWERGARDENDISTRICT

LOWERGARDENDISTRICT

GARDENDISTRICTGARDENDISTRICT

FAUBOURGMARIGNY

WESTBANK

CBD

BIO DISTRICT

CBD/BIO DISTRICT

1

23

4

5

6

8 9

7

10

1211

13

1415

16

17

17

17

18

HOTEL ROOMS

PURCHASEPRICE/ROOM

EST.ALL-IN

PRICE/ROOM

SOLD 2014

1 Country Inn and Suites (add 70 rooms) 155 $190,000 $235,000

2 Pontchartrain Hotel (lifestyle Indep conversion) 100 $190,000 $165,000

3 Staybridge Suites (land lease) 182 $123,000 $150,000

4 Okeefe Plaza (HIE conversion) 100 $85,000 $140,000

5 Quality Inn (Moxy conversion) 110 $85,000 $165,000

6 Whitney (Independent conversion) 92 $115,000 $165,000

Sheraton Four Points (WYN conversion)* 223 $54,000 $67,000

Total 962

NEW SUPPLY 2014 - 2019

7 ACE Hotel 216 N/A $235,000

8 Hyatt House 165 $21,212 $160,000

9 1111 Gravier 185 $29,730 $200,000

10 Oil and Gas Building 185 $37,838 $165,000

11 ALOFT (Mixed Use Development) 200 $180,000

12 NOPSI Building - Luxury 210 $55,238 $225,000

13 Moxy by Marriott 110 $18,182 $165,000

14 Cambria by Choice 165 $26,061 $165,000

15 WTC (Mixed Use) 250 TBD $400,000-$600,000

Total 1686

2015 ON MARKET / UNDER K

16 Le Pavillion (land not included) 216 $275,000 $335,000

17 Hampton Inn Portfolio (mgt. encumbered) 575 $145,000 $165,000

18 Doubletree CBD 367 $240,000 $300,000

*Metairie


15

• 430 NOTRE DAME STREET • NEW ORLEANS, LA 70130 • 504.569.9483 •

LEONARD VANCE WORMSER (LENNY)Senior Managing Director, Hospi tal i ty Divis ion

Direct : 504.569.9483 | Mobi le: 850.830.4595

lwormser@lat terblum.com

CHRIS R. ROSSDirector, Hospi tal i ty Divis ion

Direct : 504.569.9333

cross@lat terblum.com

SMALLER . . . S IMPLER . . . SMARTER


HOSPITALITY ADVISORY SERVICES• A BOUTIQUE INVESTMENT ADVISORY FIRM •

2015 Hospitality Advisory Services Brochure

Documents

new orleans

room moxy

new hotel developments

room ace hotel

room oil

room sheraton

institutional lodging

new players