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Strategic Hotels & Resorts - Niche Consulting for Structuring REIT Leases
"I have been working with Anne Lloyd-Jones with respect to structuring lease terms for our taxable REIT subsidiaries. ........... I value Anne's expertise and advice with respect to structuring our leases. In addition, I appreciate the timeliness of her responding to our requests to structure these leases, often on short notice. Thanks."
Bob McAllister,
Senior VP - Tax,
Strategic Hotels & Resorts
The Client
Strategic Hotels & Resorts, one of the leading owners and asset managers of high-end hotels and resorts in the industry, is a long-time client of HVS New York's consulting services. Strategic currently has a portfolio of 20 hotels in the upper-upscale and luxury segments in North America and Europe.
The Problem
Strategic needed guidance for structuring leases between the operating and owning entities for its Real Estate Investment Trust (REIT). A number of years ago, Strategic decided to expand its services by entering into the REIT business. With REITs, investors are protected from expense risk through the entity's structure, and appropriately structured leases that reflect investment trends in the market constitute an integral part of this protection. Strategic realized it needed guidance for such a lease; however, no one in the consulting or accounting arena was offering such expertise at the time.
The HVS Solutions
Strategic turned to HVS New York's Senior Vice President, Anne Lloyd-Jones, for advice. Relying on her strong client relationships, Anne was able to speak to contacts at many other industry REITs to obtain the key economics of REIT owner-operator leases that reflected market trends at that time. Anne was then able to present the information to Strategic, which had the reassurance that HVS's information was both reliable and appropriate.
