Serving the Loop and Near North neighborhoods of downtown Chicago
LaSalle rides wave of recovery in hotel industry

October 16, 2013 – A real estate investment trust that owns 45 hotels, including two in River North, is reporting revenue from July through September up from the same period last year.

LaSalle Hotel Properties, owner of Hotel Sax at Marina City and the Westin on Michigan Avenue, says nationwide its total third-quarter revenue was up 13 percent from a year ago, to $270 million. Revenue per available room grew 3.8 percent to $187.32. Average daily rate was up and so was occupancy. In Chicago, revenue per available room increased 2.2 percent, average daily rate was up 3.3 percent, but occupancy was down one percent.

During the third quarter, LaSalle spent $303.8 million to acquire four hotels. Based in Bethesda, Maryland, LaSalle owns upscale, full-service hotels in 14 markets.

Southernmost Hotel Collection

On August 28, LaSalle announced acquisition of two hotels – the Serrano Hotel in San Francisco for $71.5 million and the Southernmost Hotel Collection (above) in Key West, Florida, for $184.5 million. The 236-room Serrano is located in San Francisco’s Theater District, three blocks from Union Square.

Southernmost consists of three hotels with multiple buildings, 260 guest rooms, three bars, three pools, one restaurant, and a private beach. It is right on the Atlantic Ocean in Key West, which LaSalle calls “one of the strongest and most supply-constrained hotel markets in the United States.”

Earnings were dented by renovation costs at one of LaSalle’s hotels, the 934-room Park Central in New York, which is being split into two hotels. Nonetheless, LaSalle CEO Michael Barnello said in a news release on Wednesday that because of third quarter results, “we have increased our full year 2013 outlook.”

In August, the company was so optimistic it increased its quarterly stock dividend from 20 cents to 28 cents per share.

August was another good month for Chicago hotels in general. While occupancy was up only slightly from a year ago, to 86.4 percent, average daily rate increased about $10, according to figures released by Mayor Rahm Emanuel. So far this year, hotels in Chicago have taken in $1.2 billion.

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