Europe’s Largest Hotel Deal in 2001 – Hotel Arts Barcelona Sold

JLL London, 20th December 2001 — The Hotel Arts complex in Barcelona has been sold, representing Europe’s largest single-asset hotel transaction in 2001.

London-based Deutsche Bank AG’s Real Estate Private Equity group, together with Patron Capital Partners and a number of undisclosed co-investors have acquired the Hotel Arts complex from a Dutch-based holding company. The complex includes a 455-room grand deluxe hotel, 28 unique apartments fitted out by J. Tresserra, retail space of approximately 13,000m˛ including a casino, 12,374m˛ of office space, a vacant plot zoned for office and/or hotel uses and an underground car park. The 44 storey hotel, managed by Ritz Carlton, is located in the Port Olympic and enjoys a spectacular views of the Mediterranean.

Jones Lang LaSalle Hotels acted as exclusive advisor to the owners throughout the transaction process. “The price achieved and the strong interest generated in the hotel underpins investor confidence in quality European hotel assets” stated Mr Marsh, Executive Vice President at Jones Lang LaSalle Hotels, who concluded the deal.

Since September 11th there have been several major hotel transactions conclude across Europe. These include the Berners Hotel in London (216 rooms, €81.4 million), Barsey Hotel Mayfair, Brussels (99 rooms, €22.3 million), Heathrow Park Hotel, London (310 rooms, €21.3 million), Radisson SAS Manchester (360 rooms, €60 million), the Holiday Inn Bonn (252 rooms, €25 million) and the Villa Magna in Madrid (182 rooms, €80 million). “This demonstrates investor faith in the European hotel sector and despite many of the operating markets suffering declining occupancy and room rates, investors believe in the long-term fundamentals of the industry” said Mr Marsh.

“The transaction represents the largest single-asset hotel transaction in Europe in 2001, the second largest being the 900-room Cumberland Hotel in London which was bought by Nomura’s Principal Finance group. These two hotels, along with the 459-room Sheraton Stockholm Hotel & Towers (sold in 1997) are the only hotel assets to break the €200 million barrier” added Mr Marsh.

The Hotel Arts complex also represented the largest single-asset real estate transaction ever recorded in Spain, surpassing all office, retail and warehousing transactions.

The transaction was completed within a very tight time-frame with marketing only commencing in July 2001. The events of September 11th posed a direct threat to the smooth completion of the deal within the specified time frame. “Second round bids were called on the 16th October as the markets were coming to terms with the events of September 11th, but the high quality of the asset, its prime location in one of Europe’s strongest performing hotel markets ensured all bidding parties remained interested in the deal” stated Nick Marsh.

The financing was provided by the Royal Bank of Scotland, consistent with their strategy of expanding their hotel loan book to Continental Europe.

The Hotel Arts has been the recipient of numerous accolades and awards, and is considered to be one of the highest quality large-scale hotels world-wide. Recent awards include the Travel and Leisure magazine’s “World’s Best Values Award 2001 and 2000: Top Hotel in Europe”, “Best Overseas Hotel 2001” from the Meeting & Incentive Travel Magazine, the “Award of Excellence 2001” from the American Academy of Hospitality Sciences” and the “Best Hotel in Spain” Award from the Guild of European Business Travel Agents.

The new owners plan to fit out some available space at the top of the tower to create further apartments. A soft refurbishment of the hotel has just been completed, preserving the hotel’s exceptional quality and technical specification.

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