Venable is known for bringing dealmakers together—and for resolving the issues that arise during negotiations so that their transactions close on time. We’ve earned that reputation by managing major deals for leading owners, management companies, investors and lenders in the hospitality industry.
SKILLS THAT MAKE THE DEAL AND MAKE IT WORK
Acquisitions and property development—managing the risks.
We advise owners as they investigate the purchase of operating properties and as they develop new hotels, resorts and other hospitality projects. In addition to pinpointing any legal risks, our experience with hotel and resort transactions enables us to uncover business issues that may affect the financing, development or operation of the property. And our dealmaking experience enables us to provide solutions for managing the risks of ownership and development.
We have negotiated purchase and sale agreements of single properties throughout the United States, as well as represented buyers and sellers of billion-dollar international portfolios.
Management and ownership arrangements—knowing what will work.
We have extensive experience in structuring management agreements of all types, as well as in restructuring ownership/management relationships for both independent managers and major brands in the hotel, resort and mixed-use segments of the market.
Due diligence—identifying the problems and the solutions.
Our hospitality and real estate experience is broad and deep—with bench strength that allows us to handle several major transactions at once. To make that possible, we have developed systems for processing large amounts of due-diligence material quickly and efficiently. To speed decision-making by all parties to a transaction, we create e-rooms where documents are readily available for review. Any problems come to light early—in time for us to devise solutions that keep transactions on schedule.
REPRESENTATIVE EXPERIENCE
Buyer: RLJ Lodging Fund
Seller: White Lodging Services Corporation
100 properties: $1.7 billion—the largest hotel portfolio transaction to date.
Deal structure: Venable represented White Lodging. In Phase One, 87 operating hotels were conveyed to RLJ. The remaining 13 hotels were conveyed individually approximately a year after each of those hotels was placed in service.
Multiple sellers, lenders and servicers: Because many of the selling entities included investors, we helped White Lodging negotiate participation agreements with each of the ownership groups.
Taxes: We structured the transaction to provide optimum tax treatment for White Lodging and its investors.
Management agreements: White Lodging continues to manage the hotels under agreements negotiated by Venable. As part of securing the management agreements, we negotiated non-disturbance agreements with RLJ’s lenders.
Defeasance: 28 of the hotels had loans that required defeasing. Venable attorneys worked with the sellers to negotiate agreements with each of the parties to the defeasance transactions.
Cost savings: We created uniform documentation and defeasance procedures—and used the same law firm to prepare the defeasance documents and represent the interests of the servicers at closing. The savings were substantial.
Remediation: As RLJ completed its due diligence and identified its concerns, Venable assisted in negotiating the scope of remediation that White Lodging would be responsible for undertaking—and worked feverishly to address those issues so that closing could occur without delay.
Simultaneous closings: We worked with counsel for RLJ and counsel for multiple servicers to close the sale and the loan-assumption transactions at the same time.
Buyer: Marriott International, Inc.
Seller: Host Hotels and Resorts, LP
Three hotel acquisition, repositioning and resale.
Deal structure: We represented Marriott in its acquisition of an existing three airport hotel complex then under Marriott management for the purpose of repositioning and reselling the group of hotels. The repositioning included the demolition of one of the existing hotels and the construction of a different Marriott branded hotel in its place, as well as upgrades and refurbishments to the other two hotels on site. The acquisition and subsequent sale were each structured as a sale of membership interests, thereby reducing transaction costs.
Due diligence: Venable lawyers conducted title review, reviewed environmental studies and negotiated an amendment to the existing ground lease on the underlying property.
Development agreement: Venable lawyers drafted and negotiated a development agreement for the construction of the new hotel on behalf of the take out purchaser.
REIT/HOSPITALITY CONNECTIONS
Venable attorneys are among the leading authorities in the country on REIT transactions. We represent more than one-third of the nation’s publicly traded REITs, including several that focus on hospitality properties.
At Venable, you’ll see the big picture with confidence that the details are in place. Our Hospitality attorneys provide the creativity and experience to structure transactions to meet diverse needs and circumstances—and the deep resources to ensure that transactions proceed on schedule without surprises or delay.