Consulting & Valuation - Success Stories

HVS Selected as the Appraisal Firm for the Blackstone-Hilton Hotel Transaction

Overview

In July 2007, the Blackstone Group announced plans to purchase Hilton Hotels Corporation for $26 billion. The banks behind the capital needed quick, efficient appraisals of Hilton properties around the world before committing to an investment. Faced with the challenge of underwriting Hilton’s global portfolio of assets and multinational hotel and vacation ownership operations, HVS was selected to produce a value on an international stage. HVS completed this monumental task, and the biggest buyout in the history of the lodging industry closed on October 24, 2007.

The HVS Assignment

Several factors designated HVS as the only appraisal firm capable of the enormity of the task. HVS had performed assignments for the investment team behind the Blackstone-Hilton deal for years, forging a solid business relationship. Second, HVS’ global scope ensured that our consultants could be on the ground inspecting Hilton properties within a short time frame and at minimal expense. Additionally, our expertise in the valuation of hotel and vacation ownership assets qualified HVS to appraise the entire Hilton portfolio.

HVS executed the assignment in three phases: Fieldwork, Analysis, and the Composition of the Final Reports. Under the leadership of Rod Clough (Managing Director of HVS Dallas), the primary point of contact for our client, with direct oversight from Steve Rushmore (President and CEO of HVS), HVS offices around the world assembled their respective teams to undertake this substantial assignment. Russell Kett in London, David Ling in Singapore, and Diogo Canteras in São Paulo spearheaded the appraisals outside of the United States. The valuations of the U.S. properties were supervised by senior executives in our U.S. offices, including Rod Clough, Suzanne Mellen, Roland de Milleret, and Hans Detlefsen. Anne Lloyd-Jones (Senior Vice President of HVS New York) performed the valuations of Hilton’s franchise and management agreements, and Hilton’s eight brands, including the illustrious Conrad and Waldorf=Astoria. Kathleen Conroy and John Lancet (Managing Directors of HVS Miami) performed the valuation of the Hilton Grand Vacations Club timeshare component, which included the value of unsold inventory, the residual value of developable land, and the market value of Hilton’s management contracts and club operation. HVS successfully coordinated the global valuation of Hilton’s entire portfolio and met the client’s timeline of one and a half months.

The Result

The following statistics highlight the size and scope of this landmark assignment:

• Ten HVS offices directly participated;
• Properties in 25 countries across 6 continents were appraised;
• A total of 166 hotels were appraised, spanning 70,516 rooms;
• Notable Hilton hotels in the portfolio included the Waldorf=Astoria in New York, the Hilton Hawaiian Village Beach Resort & Spa in Honolulu, and the London Hilton on Park Lane;
• HVS performed the brand valuation (management and franchise agreements) of 2,772 hotels, spanning 474,930 rooms;
• HVS conducted the valuation of the Hilton Grand Vacations Club.