Loews Hotels & Resorts, a wholly owned subsidiary of Loews Corporation (L - Free Report) closed the purchase of Renaissance Hotel & Spa in Hollywood, California. The 632-room asset was purchased from CIM Group and renamed Loews Hollywood Hotel.
The expected $26 million renovation program is scheduled for completion in the summer of 2013. The renovation will be completed in stages so that the services, which the guests can avail are not hampered.
This acquisition is the first amongst Loews’s plans of nearly doubling its hotel count by the next three to five years. It aims to add more hotels to its portfolio in order to take the count from 18 to over 30. It also expects a threefold growth in its net income in the next three years.
Renaissance Hotel & Spa features Hollywood & Highland Center, a 460,000-square-foot, five-story construction having more than 80 specialty retail outlets. The complex has 26 restaurants and eateries, two nightclubs, seven movie screens, eight bars and 12 bowling lanes.
It also features 65,000 square feet of meeting space and 25,000-square-feet of ballroom space.
With capital at disposal to acquire and develop property, management will seek like opportunities in Boston, Chicago, San Francisco, Washington, D.C., New York, Dallas, Toronto and Seattle to add assets to its portfolio, thereby aiding it to cater to a larger customer base.
Loews Hotels’ net income in the first quarter doubled to $4 million from the year-ago level. We believe, the addition of this hotel to its portfolio will help the company to continue delivering such robust numbers. These initiatives will further boost the company’s hotel business.
We retain our Outperform recommendation on Loews Corporation. The quantitative Zacks #1 Rank (short-term Strong Buy rating) for the company indicates a boost on the stock over the near term.
Headquartered in New York, Loews Corporation is a diversified holding company. The company’s principal subsidiaries are CNA Financial Corporation (CNA - Free Report) , Diamond Offshore Drilling Inc. (DO - Free Report) , Boardwalk Pipeline Partners LP, Loews Hotels Holding Corporation and HighMount Exploration & Production LLC.