InterContinental Hotels Group, the hospitality group with the largest presence in the Kingdom of Saudi Arabia, is further expanding its portfolio. IHG has inked an agreement with Dyafah Al Mutahida L.L.C. that will see a new Staybridge Suites open in the city of Jeddah. This will be the company’s first Staybridge-branded property in Saudi Arabia, under the name Staybridge Suites Hira Street.

Set to be located in central Jeddah, the 200-key hotel would be just 4.3 miles away from the city’s King Abdulaziz International Airport. It will be built on a 3.6-acre site and will include retail outlets, a healthcare facility and a multi-purpose hall. Suites are designed to render a residential ambiance that would satisfy the needs of extended-stay business guests, the brand’s target audience. Fully-equipped kitchens, free Wi-Fi, separate working areas and entertainment and communication facilities are also part of the package hotel guests can expect.

Jeddah is the second largest city in Saudi Arabia, with a population of around three million, second only to the capital city of Riyadh. The city has an important financial background, the first bank in the country being founded in Jeddah, and it is also one of the area’s primary resort cities. Jeddah was ranked fourth in 2009’s Innovation Cities Index for the Africa/Mid-East region.

IHG has its sights set on the city, as it has identified Jeddah as a major growth market for the area. InterContinental Hotels Group already operates the 300-room InterContinental Jeddah, the 323-key Crowne Plaza Jeddah, and the 319-key Holiday Inn Al Salaam Jeddah. Overall, the company operates 22 hotels in Saudi Arabia, or a total of 5,111 rooms. The Staybridge Suites brand, catering to extended stay guests, has enjoyed a large amount of success since the first facility was opened under the brand, in 1998. Around 200 such facilities are now open worldwide.

 In the latest round of the high-stakes competition to masterplan and redevelop the 52-acre Miami Beach Convention Center, the South Beach ACE team yesterday laid out the key points of both proposals and contended not only that its plan is better, but that the Portman-CMC plan is shifting to resemble their own.

Last week, Commercial Property Executive reported on a letter of intent that Portman-CMC had sent to the City of Miami. That letter described the business and financial terms of the group’s proposal and of course emphasized what Portman-CMC believes are the advantages of its plan. <www.cpexecutive.com/cities/miami/portman-cmc-reveals-cost-effective-master-plan-for-miami-beach-convention-center/>

The exchange might be the last before Miami Beach commissioners decide which development team to choose for the $1 billion-plus project, though apparently no firm date has been set for that announcement. At that time, a public referendum will be scheduled to approve the plans or maintain the status quo.

Portman-CMC consists of a master development team (Portman Holdings, CMC Group, Bal Harbour Shops and Cirque du Soleil) and a master design team (BIG/Bjarke Ingels Group, John Portman & Associates, West 8, Fentress Architects and Revuelta Architecture International), along with engineering, construction and finance consultants.

South Beach ACE includes Tishman, UIA, architecture partnership OMA (led by Rem Koolhaas and Shohei Shigematsu), MVVA/Michael Van Valkenburgh Associates, Raymond Jungles and tvsdesign.

As to the competing plans, in broad strokes:

* The South Beach ACE plan calls for a taller facility with a smaller footprint, intended in part to free up more than 28 acres for green space, but also to improve pedestrian access through and around the site. Portman-CMC contends that its lower structure (124 feet versus 194 feet of height) won’t take views away from neighboring properties or risk casting a shadow on the nearby Holocaust Memorial.

* The Portman-CMC proposal will cost the public less, and the group will charge the city less in design and development fees. South Beach ACE counters that its financing package carries only 50.9 percent debt and that MetLife has tentatively committed to signing on as a partner, while Portman-CMC has proposed 61 percent debt and has not announced an equity partner.

* South Beach ACE touts its better integration of the convention center and hotel in one building, while Portman-CMC contends that it can build its version 19 months faster, saving the city substantial money.

The two plans will be displayed side by side at Miami Beach City Hall, Mondays through Saturdays through June 21.

The convention business is mature enough that any municipality aiming to increase its share has to wrestle the business away from someone else, Hank Staley, senior vice president at the Jacksonville office of PKF Consulting USA, told Commercial Property Executive. He contrasted Nashville’s convention center, now nearing completion and enjoying substantial presales, with Philadelphia’s new convention center, which has significantly underperformed.

Whichever proposal is accepted for the Miami Beach Convention Center, Staley said, the center is likely to do very well indeed, as the area remains extremely popular as a destination. He noted that the metro Miami hotel market has “roared back” since the worst of the recession, and in 2011 regained its 2007 peak RevPAR, one of the few major cities so far to have done so.

Real estate investment is increasingly becoming a global business, with widening competition as more players place money around the globe. Depending on investment goals, players may be drawn to the recovering U.S. markets or the lagging European markets. And while U.S. investors seek opportunities in Asia, local investors there are already well entrenched.

Foreign investors are so eager to pursue opportunities in U.S. real estate that they are racing to join the biggest deals, making it sometimes difficult to differentiate between clients and competitors. That was a conclusion among speakers on the Urban Land Institute Spring Meeting keynote panel, “Capital Markets: Who Has the Capital and Who is Getting It,” which was moderated by Christopher Ludeman, CBRE Group Inc. president of brokerage services and the capital markets. Capital is flowing in from around the globe, ranging from the top-ranking Koreans—now permitted to invest abroad and only held back in the U.S. by FIRPTA limitations—to those from the Middle East and Canada, noted LaSalle Investment Management global head of the capital markets Jon Zehner. And he is keeping an eye on China and Australia as capital sources.

The Japanese, too, are eager to invest outside their slow-growing borders, noted J. Michael Stedman, senior executive vice president of Union Bank, whose employer is owned by Bank of Tokyo/Mitsubishi.

Meanwhile, some big U.S. investors see more opportunity overseas than in their own backyards. Zehner observed that the spread between assets in primary and secondary markets is now 75 to 100 basis points in the U.S. and Canada but 250 to 350 basis points in Europe. In fact, his company is representing a major Asian financing source venturing with a regional European fund to invest in U.K.-located residential property. The U.K. economic cycle is six to 12 months behind the U.S.’s, according to Charles Fedalen Jr., executive vice president & group head of the Wells Fargo CRE Institutional and Metro Markets Group and the Wells Fargo Real Estate Banking Group.

Elsewhere, John Miller, senior managing director for Tishman Speyer, pointed to a fund his company recently put together using Chinese currency to invest in that country. He noted a lot of pent-up demand there.

Wherefore Art U.S. Returns?

Speakers on “The Next Best Bet: Making the Case in a Capital Constrained Market” all expressed interest in European investment. But they also see opportunity in various segments of the U.S. market, although with the U.S. recovery at something of a midway point, identifying risk-adjusted returns can be challenging, they said.

The multi-family sector continues to attract attention, and PIMCO vice president Chris Flick is no exception. He said he still sees room for growth even though the best deals were done two years ago. Damian Manolis, managing director at Prudential Real Estate Investors, advised seeking out micro areas that work, even in more concentrated cities like Seattle and Washington, D.C.

Starwood Capital Group senior vice president Mark Deason, however, sees more opportunity in recovering sectors such as the office market, where he said you can still achieve cash-on-cash returns in the double digits (although largely only as much as 10 percent). Pricing is far ahead of fundamentals in the primary markets but more closely aligned in secondary markets, he noted, although he confessed to remaining focused on the primary cities. And Manolis pointed to the recovering job market and lack of development as contributing to a more solid office sector, even while companies are pursuing smaller space-per-person ratios and hoteling to minimize office size. Flick was less optimistic about the sector but allowed that opportunity could increase as conditions improve.

The panel as a whole was less optimistic about retail and industrial property, although Flick suggested a “barbell” model to retail opportunities, with high- and low-end properties offering the best bets. Grocery-anchored centers, he said, are too popular to offer good deals. That makes it necessary to focus on in-line retailers for growth—and that, the panel agreed, requires strong relationships with national retailers, the better to identify expansion plans. As for industrial, only development offers returns, Flick affirmed.

It is also challenging to find good hotel deals, especially in the limited-service segment, Deason said, although his company has been an active hotel buyer. The panel agreed hotels may have hit the bottom of the cycle and are about to turn upward again.

A series of audience polls turned up continued favor for the multi-family, industrial and retail sectors, with office and hotel eliciting a more negative response.

Wyndham Hotel Group announced plans to open the first Wyndham Hotels & Resorts property in the United Arab Emirates after signing an agreement with Sigma III Limited, a subsidiary of British-owned developer The First Group, to manage its 33-story building in the Dubai Marina.

The Wyndham Dubai Marina is currently under development and is expected to open in the next three years. The hotel will feature 497 guest rooms, including 251 luxury suites. The Wyndham Dubai Marina will also include close to 6,800 square feet of food and beverage outlets, including a coffee shop, an executive lounge and a bar, all-day dining and specialty restaurants. The hotel, besides the meetings and conference space, will also offer almost 2,500 square feet of spa and leisure facilities which will include a gym and outdoor pool with a pool bar.

“We’re very excited to be bringing our namesake Wyndham Hotels and Resorts brand to Dubai, following its successful introduction to the region through the spectacular Wyndham Grand Regency Doha,” said Eric Danziger, Wyndham Hotel Group president &CEO.  “I have no doubt that Wyndham Dubai Marina will be another superb addition to the brand, which we are already growing in key cities throughout the Middle East.”

In the Middle East, Wyndham Hotel Group has opened the Wyndham Grand Regency Doha in 2011 and has already announced the development of two Wyndham Hotels and Resorts properties: the Wyndham Grand Manama and Wyndham Grand Riyadh. Both properties are expected to open by the end of next summer.

“We are delighted to have Wyndham Hotel Group on board and are certain this partnership will be a huge success,” said Gary Shepherd, co-founder and joint chairman of The First Group. “Wyndham Dubai Marina adds to our dynamic portfolio of hotel projects across the U.A.E. and Africa and we look forward to watching this stunning project take shape.”

Backed by a $660 million loan from a London investment fund, Silverstein Properties said it will begin construction this fall on a $950 million, 82-story skyscraper in Downtown Manhattan that will comprise a 185-room Four Seasons hotel and 157 luxury condos.

At 926 feet, it will be the tallest residential building in Downtown Manhattan and one of the tallest buildings in New York City. Located at Park Place and Church Street in Tribeca, the Four Seasons Hotel and Private Residences New York, Downtown, is expected to open by 2016. Now being called 30 Park Place, the site is the former Moody’s headquarters then known as 99 Church St. Silverstein Properties and the California State Teachers’ Retirement System (CalSTRS) bought the site from Moody’s in 2007. Silverstein unveiled plans for the hotel-condo project in January 2008 during an update on rebuilding efforts at the nearby World Trade Center site. But plans were put on hold following the fiscal downturn that started several months later causing credit markets to freeze.

Five years later, the project is moving ahead now that the financing has been secured from The Children’s Investment Fund Management L.L.P. of London.

“This project perfectly fits our investment strategy in New York City, which includes other high- end residential projects such as 432 Park Ave. and 737 Park Ave.,” Martin Frass-Ehrfeld, partner at TCIF, said in a news release. He said the fund was excited “to provide financing to a pristine group of partners.”

Larry Silverstein, president & CEO of Silverstein Properties, Inc., said the new tower will become a new and distinct landmark in the city’s skyline.

“It will join and enhance a world-class neighborhood that is already home to a dynamic blend of modern office towers, private residences, high-end retail and dazzling public spaces,” he said in the statement. “Downtown is fast becoming a vibrant, integrated, mixed-use destination on a scale not seen in New York City since Rockefeller Center in 1939.”

Robert A.M. Stern Architects is designing the building and the private residence floor plans and interiors. Yabu Pushelberg is designing the hotel interiors. SLCE Architects is the Architect-of-Record. Tishman Construction is the general contractor. The firm, which built 7 World Trade Center for Silverstein Properties in 2006, is also the general contractor for 3 and 4 World Trade Center. Corcoran Sunshine Marketing Group expects to begin marketing and selling the condos in spring 2014.

“We are thrilled that the project at 99 Church is slated to go forward and contribute to the tremendous growth in Lower Manhattan’s hospitality industry,” a spokesperson for the Alliance for Downtown New York, told Commercial Property Executive. “As the buildings at the World Trade Center site come online and major tenants, including Conde Nast, open their doors in Lower Manhattan, this hotel and others will serve as a huge draw to the city’s leisure and business travelers.”

Before 9/11, there were six hotels in the area. There are now 18 and the number of hotel rooms has grown by 78 percent to 4,100, the spokesperson noted, adding that there should be 23 hotels with more than 5,100 rooms south of Chambers Street by 2014.

The spokesperson added that the alliance partnered with NYC & Co. beginning two years ago to showcase the area’s recovery and revitalization. The international campaign urging visitors to stay in Lower Manhattan hotels and eat and shop in the area has been very successful.

When it opens, the Four Seasons will feature three floors of lobbies, lounges, a restaurant, ballrooms, meeting facilities, a spa, fitness center and pool. The hotel entrance will be on Barclay Street and there will be a second entrance to the restaurant on Church Street. The public rooms of the hotel will overlook a landscaped public plaza.

“Adding a second hotel to our existing iconic property in New York on 57^th Street, will be a great addition to the portfolio of the Four Seasons,”  Scott Woroch, executive vice president worldwide development, Four Season Hotels and Resorts, said in the news release.

Silverstein Properties and the Four Seasons are also teaming up in Orlando, Fla., where the world’s largest Four Seasons resort is under construction on the northeast portion of Disney World. The 445-room luxury resort is expected to open in July 2014.

CBRE Strategic Partners U.S. Value 6 fund is making its first hotel acquisition with the purchase of the San Jose Marriott, a 506-room, full-service hotel that is attached to the San Jose Convention Center.

Sponsored by CBRE Global Investors, fund officials did not publicly disclose the sale price or the seller citing a confidentiality agreement. However, several media reports state it was Prudential Real Estate Insurance (PREI). The Silicon Valley Business Journal put the price at between $80 million and $85 million while the Private Equity Real Estate (PERE) global news service said the hotel sold for $83 million. CBRE Global Investors would only say that it bought the 28-floor hotel at 301 Market St. for “significantly less than replacement cost.”

“The Silicon Valley lodging market is fed by strong corporate demand from the significant concentration of high-tech companies in the region,” Vance Maddocks, president of CBRE Strategic Partners U.S., said in a news release. “With strong current cash flow, the San Jose Marriott, in particular, is an attractive business hotel with an added benefit of being directly connected to the now-expanding San Jose Convention Center.”

The Strategic Partners U.S. team is planning renovations at the hotel, which opened in early 2003. The plan includes upgrades to guest rooms, suites, corridors, the lobby, and meeting space, according to a CBRE Global Investors spokesperson. The dollar amount was not released.

SCS Advisors, the original developer of the hotel and a leading hotel asset management company, will serve as the asset manager. The hotel was built for $93.9 million with $10.6 million provided by the San Jose Redevelopment Agency, according to an agency document. It is still the newest hotel in the submarket, according to CBRE Global Investors. Features include a swimming pool, fitness room, business center, 23,000 square feet of meeting and event space and acclaimed restaurants.

The hotel purchase comes five months after the Strategic Partners U.S. team purchased Fairmont Plaza, a 17-story office building at 50 West San Fernando St. in downtown San Jose, from Forest City Enterprises Inc. for $93.1 million.

CBRE Global Investors closed the Strategic Partners U.S. Value 6 fund in December with equity commitments of almost $1.1 billion from 22 institutional investors. It is expected to have total purchasing power of $2.7 billion. As of December, the fund had already closed on or committed more than $900 million in investments, including several multi-family and office properties.

The global real estate investment management had $90.7 billion in assets under management as of March 31. It is an independently operated affiliate of CBRE Group, Inc. Founded in 2000, the Strategic Partners U.S. program has closed eight funds and three co-investment partnerships.

Pan Pacific Hotels and Resorts’ newest location, the Pan Pacific Serviced Suites Beach Road in Singapore, made its debut on May 7. The 180-key extended-stay luxury property represents the company’s fourth Singapore location and its second Serviced Suites-brand hotel in the country, following the 120-key Pan Pacific Serviced Suites Orchard, which opened in 2008.

Located on Beach Road, the $81 million asset is in close proximity to the Marina Bay Central Business District as well as the Haji Lane and Arab Street cultural districts. The Raffles Place business district and the Clarke Quay and Boat Quay entertainment district are both nearby. The Bugis and Nicoll Highway stations on Singapore’s Mass Rapid Transit system are a short walk from the property.

Pan Pacific is aiming to combine high-end hotel features with the comfort of a private residence. Amenities include a fully-equipped fitness center, rooftop swimming pool as well as made-to-order breakfasts on weekdays. Other lifestyle amenities include the Pacific Lounge and Living Room, complete with gaming corner equipped with Xbox console as well as a library.

Available in 484-square-foot and 710-square-foot layouts, guest rooms feature two LCD televisions, laundry facilities, full-service kitchenettes, high-speed Wi-Fi, as well as wired internet service and an audio system complete with docking station. Business amenities include meeting space, parking facilities, complimentary Wi-Fi and complimentary shuttle service to Singapore’s business districts.

In addition to the two Serviced Suites properties, Pan Pacific’s Singapore hotels include the Pan Pacific Orchard and the Pan Pacific Singapore. The company has 20 properties in operation and under development in nine countries across the Pacific Rim. Locations include Vancouver and Whistler, both in Canada, Seattle; Perth, Australia; Suzhou, China; and Bangkok, Thailand.

There’s been no lack of activity in the metropolitan Jacksonville hotel market this year, and the Hampton Inn & Suites Ponte Vedra and the Courtyard by Marriott Flagler Center are among the latest properties to change hands. Commercial real estate services firm CBRE Hotels, acting on behalf of different sellers, recently facilitated the disposition of the assets in transactions totaling approximately $17.8 million.           

Mercury Investment Co. picked up the 13-year-old Hampton Inn, which carries the Jacksonville Beach address of 1220 Marsh Landing Pkwy., from Marsh Landing Hotel Associates L.L.C. for $8.4 million. The 117-room hotel benefits from its location within close proximity to the Mayo Clinic.

Peachtree Hotel Group grabbed a piece of the Jacksonville pie with the approximately $9.4 million purchase of the six-year-old Courtyard from Jacksonville Hotels Associates L.L.C. With a location at 14402 Old St. Augustine Rd, the 120-room property offers easy access to the JaxPort Cruise Terminal.

Both of the new owners plan to upgrade the latest additions to their respective portfolios, with the Hampton Inn getting a few more enhancements to its recently completed refreshing, and Courtyard undergoing a major renovation. 

Strong travel and tourism activity is bolstering Jacksonville’s hotel market, as noted in a recently released report by PKF Hospitality Research. Visitation among the leisure crowd is on the rise, and conventions in the area are attracting more attendees. The experts expect the good times to continue. “The outlook for 2013 remained positive with hospitality contacts projecting increases in occupancy rates,” per the report.

Brack Capital Real Estate, a global real estate investment and development company, has sold The James New York, a luxury hotel in New York’s popular SOHO neighborhood, for approximately $85 million to an undisclosed buyer.

“There is an enormous appetite in the current market for income-producing assets that can generate cash. In an environment where interest rates are at historical lows and the future is unclear, investors that are looking for safe returns don’t have too many alternatives,” Issac Hera, BCRE’s CEO, told Commercial Property Executive. “The James New York presented such a great opportunity for buyers. Analyzing these facts, BCRE decided that it was the right time for us to realize the value we created at the James New York and look for new opportunities.”

Located at 27 Grand St., the 114-room hotel will continue to operate with Denihan Hospitality Group carrying on management, along with notable chef David Burke remaining to produce the highly acclaimed food and beverage menu.

Developed in 2010, the hotel was designed by ODA in collaboration with Perkins Eastman and Thomas Schlesser. The property features meticulously designed guestrooms and suites; sleek and spacious amenity spaces; renowned restaurants David Burke Kitchen and the Garden at David Burke; and a coveted rooftop lounge, called Jimmy, which includes jaw-dropping city skyline views, a private pool with cabanas and a bar with both indoor and outdoor seating.

The hotel includes spacious corner guestrooms with panoramic city views, one-bedroom suites and an impressive penthouse loft on the 15th floor. All rooms include carefully honed reclaimed materials complemented by a serene color scheme, to create a modern and inviting space. Additionally, the amenity spaces are bright and expansive, offering open, inviting common spaces not typically seen in comparable boutique properties. 

According to Hera, once value was created and the right opportunity presented itself, the company decided to realize its investment and focus efforts on locating its next opportunity to create value.    

“Downtown Manhattan is attracting many visitors and hotel guests that are looking for a unique experience of New York compared to what they would encounter in such locations as Midtown or Times Square,” he said. “This trend provides the opportunity for developers like BCRE to bring very unique assets, like the James New York, to the market that offer a distinctive design and program for discerning guests. We are continuing to focus on this market and are currently working on developing two hotels in the Downtown area that will be as unique and distinctive as the James New York and, I am confident, will be just as successful.”

Lend Lease has secured $465 million in debt financing from Bank of America and is moving ahead with the third and final phase of renovating and developing more than 11,000 hotel rooms on 39 U.S. Army installations with Intercontinental Hotels Group-branded hotels.

Known as the Privatization of Army Lodging program (PAL), the $1 billion project is expected to be completed in eight years. The third phase will include approximately 3,800 new or renovated hotel rooms across 18 military installations. The program provides on-base lodging for soldiers, their families and government travelers. Operating under the name IHG Army Hotels, the renovated hotels will be run as Holiday Inn Express facilities. New construction will be operated as Candlewood Suites and Staybridge Suites brand hotels. Since the public-private project began in 2009, Land Lease has delivered six Holiday Inn Express hotels, including the first hotel at Fort Polk, La. There are five Candlewood Suites hotels under construction, including a 310-room hotel at Joint Base San Antonio in Texas that will be the largest Candlewood Suites in the world when it is finished. A Staybridge Suites hotel is planned for Fort Belvoir in Virginia.

“We should have Fort Riley (Kansas) and Yuma Proving Ground (Arizona) Candlewood Suites open by August,” Charles Smith, an executive vice president with Lend Lease (U.S.) Public Partnerships, told Commercial Property Executive. “We have yet to finish all the renovations. We are very close on A, the first phase. We’re on our way and making good progress on B (second phase) and starting on Group C (the final phase).”

The PAL program began in 2009 when Lend Lease assumed ownership of on-post hotels at 10 bases. Lend Lease, a subsidiary of the Australian-based conglomerate, had previously been selected as the asset manager, developer and design builder for the Army’s entire lodging portfolio. IHG, one of the world’s largest hotel groups, was chosen as the PAL hotel operator. In 2010, Land Lease began the second phase with hotel projects at 11 additional military installations.

The decision to privatize the on-post hotels, much like the Army’s housing facilities, came after a 2003 study found that more than 80 percent of the inventory need to be recapitalized and would cost the government more than $1.2 billion and take 20 years to complete. The PAL program saves the government money in several ways, including a 25 percent discount on per diem lodging costs for the service members, families and other official travelers. The military travelers can now take advantage of IHG guest loyalty reward programs at the on-base hotels, which weren’t available in the past.

Lend Lease has a 50-year ground lease with the Army that terminates in 2059. Any money left over after operating expenses is reinvested back in the renovation and construction projects.

“It’s a beautiful model for the military,” Smith said. “It guarantees they can never get in disrepair again.”

“The results speak for themselves, with new and renovated brands that offer service members and their families the lodging experience they both deserve and desire, and at a cost that is less than the government per diem,” Rhonda Hayes, chief, Capital Ventures Directorate of the Office of the Assistant Secretary of the Army, Installations, Energy & Environment, said in a news release. “The knowledge and expertise that Lend Lease and IHG bring to the PAL program not only validates their positions as industry leaders, but also remains key to the initiative’s long-term success.”

When the PAL program is completed in 2021, there will be 76 IHG-branded hotels with about 11,600 rooms in the U.S. and Puerto Rico at military bases. IHG notes that it already employs nearly 1,800 people at its on-post hotels.

“As a leading employer, we have the ability to create economic opportunity for people in the communities where we operate,” Arthur Holst, vice president, Operations-IHG Army Hotels, noted in the news release.