Back to top

Analyst Blog

The multi-operator real estate investment trust (REIT), LaSalle Hotel Properties (LHO - Snapshot Report) disclosed the acquisition of a San Francisco-based property – Serrano Hotel – for $71.5 million. The deal is part of the company’s strategy to capitalize on the opportunities provided by the booming San Francisco lodging market.

LaSalle financed the deal through borrowings from the unsecured senior credit facility. The acquired asset will continue to be operated by Kimpton Hotels and Restaurants.

Calif.-based, Serrano Hotel is positioned at 405 Taylor Street in the center of San Francisco’s Theater District. The property is in proximity to Union Square, The Financial District, Chinatown, Grace Cathedral, Nob Hill, Sony Corporation’s (SNE - Snapshot Report) Metreon and the Moscone Convention Center. In addition, Serrano Hotel can also benefit from the growing corporate demand in the South of Market and Mid-Market areas driven by technology-related tenants.

With such a locational advantage, the hotel provides several shopping, dining and entertainment choices. It has 236 guest rooms including 19 suites, with 2,553 square feet of meeting space in 5 flexible meeting and banquet rooms.

Notably, San Francisco has been emerging as the one of the top lodging industry markets in the U.S, with improving Revenue Per Available Room and Average Daily Rate trends. This justifies LaSalle’s strategic move to acquire Serrano Hotel.

In fact, this is not the only San Francisco-based asset buyout of LaSalle in recent times. Earlier this month, the company bought 2 properties – Harbor Court Hotel and Hotel Triton – for $47.8 million. We expect these activities to boost the company’s revenues going forward.

LaSalle owns luxury and upper-upscale hotels in high barrier-to-entry markets throughout the U.S. The company specifically focuses on owning, redeveloping and repositioning upscale full-service hotels in urban, resort and convention markets. LaSalle currently owns 11,400 guest rooms in 14 markets across 10 states in the U.S. and the District of Columbia.

LaSalle presently has a Zacks Rank #3 (Hold). Better performing REITs include Hospitality Properties Trust (HPT - Snapshot Report) and Public Storage (PSA - Analyst Report). Both these stocks carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%
NUSTAR GP H… NSH 41.14 +2.59%