PartA and B
PebblebrookPresentation (PebblebrookHotel Trust, 2016)
Pebblerock is a matrix organization. It is devolved into departments which are headed by individuals and have employees answering to a single head of the department to which they belong.
The difference between Pebblebrook and other large hospitality organizations is that it was formed recently and relied on acquiring other hotels instead of building them from scratch.
In a bind pool REIT, real estate companies raise money from investors through taking advantage of the name of a given company or individual. The strategy, however, does little to protect investors.
EBITDA is a way of measuring the level profitability of a given company as a proportion of the revenue that it acquires. One difference between EBITDA and FFO is that EBITDA measures the profitability of all companies while FFO measures the amount of money obtained from Real Estate investment trust.
The investment strategy for Pebblerock lies in investing in different geographical regions, diversify operations and invest in several operations so as to maximize profits.
There is a difference between asset manager. An asset manager is concerned with sourcing for profitable assets and offsetting those that are not profitable while a general manager is involved in the general operations of an organization.
The source of capital for REITs such as Pebblerock involve loans from financial institutions as well as equity from investors. The cost of capital is high while their leverage is low
The key difference between public REITs and private equity is that in public REITs, other investors can join them while the membership for private equity is highly controlled. Another difference lies in the fact that public REITs may receive a lot of funds in investments compared to private equity.
One example that the speakers used for ‘Activist’ stakeholders is the enhancement of a high share price as the best defense. The second example provided is the expectation to see more and not less.
I believe that Pebblebrook invests mainly in Coastal and Urban locations because they offer the best market due to the capability of the people available in those areas.
The operators of Pebblebrook are mainly independent as opposed to brands because they help to reduce the cost that would be used for hiring brand operators.
The strategy to lean towards more business vs. leisure has the benefit of creating room for significant rate premiums.
The one approach that Pebblebrook applies to create value through asset management is that of Strategic capital reinvestment which may be done to reposition properties to enhance profitability. The second approach is that of Constant Revenue Management which involves the evaluation of market mix and pricing strategies.
When they say, “We believe the public market is significantly discounting the value of our assets compared to our estimate of how the private markets continue to value high-quality hotels in major urban markets.” They mean that the market expects to pay much lesser compared to what they ought to, thereby reducing the profitability of the company.
PARTB: CONCORD HOSPITALITY ENTERPRISES (Laport,2016)
The developer carries out an LOI then an option contract to ensure that they are able to ensure that all requirements are evaluated. The third stage lies in having a purchase and sale agreement that is normally done after due diligence.
The competitive set analysis is the state in which a firm can carry out an evaluation to determine whether a given venture will be beneficial for a company. With the merger of Marriot and Starwood, this would present a problem in that they would need to look into the past performances of both companies.
The reason behind more select service versus full service would mean that the companies would be able to focus on businesses that they are highly conversant with for the purposes of growth.
Entitlement means the costs that are quite important to a company and cannot do without it.
Marriot acquired AC hotels because it wanted to target generation Y customers, as this was the value that the hotels would bring to the company.
Some of the unforeseeable situations that could throw off the timeline of a project and over budget could be such as changes in the prices of materials, inflation and rise in the cost of labor that could mean that a given developer may need to dig dipper into his pocket so as to meet the cost. Such cost increments may be passed to the owner of the development.
LEED certification touches in registering the given project, making an application for the certification process and the GBCI carrying out a review of the application. The last step involves the certification after it has been established that the firm meets all the requirements. Concord thinks that it is a good idea to go for the registration process because it ensures that the firms contracted are proven to be competent. I fully agree with such.
After a general contractor has been assigned to the project, Concord ensures compliance through carrying out site planning and prelim design, entitlements, environmental and geotechnical studies and preliminary project costing to ensure that the client receives what he has paid for.
The percentage of the capital stack that represents stock is 30%
Typically, Concord offers its investors better dividends due to its better performance in the market.
Laport,M (2016). Hospitality Business Real Estate Investment Management
PebblebrookHotel Trust (2016). 2016 Michigan State University – HB382Hospitality Business Real Estate Investment Management