RALEIGH, N.C.—Concord Hospitality Enterprises, one of the top-ranked hotel developer/owner/operators in North America, announced that it has stepped up its growth strategy for 2013 to include opportunistic acquisitions/divestments and third-party management in addition to continuing its aggressive development program. In 2012, the company committed more than $500 million to new development, and opened two hotels, while breaking ground on an additional six. For 2013, Concord expects to triple that performance by opening six hotels and breaking ground on 10. Looking ahead to 2014, Concord expects to open 12 newly developed hotels.
“We have a very aggressive pipeline of 17 LEED-designed hotels, that include two Cambria Suites projects in New York, and one in Washington D.C.,” said Mark Laport, president and CEO. “We also are very active in numerous secondary U.S. markets and Canada and will expand our presence in Cleveland and Pittsburgh.”
Openings in the near future include a 153-room Courtyard by Marriott in Cleveland, Ohio, a 136-room Hyatt House in Pittsburgh, and a 137-room Hyatt House near Concord’s Raleigh, N.C. headquarters.
Laport reinforced Concord’s commitment to environmentally-responsible development noting that the company recently won Marriott’s first ever Marriott’s Spirit to Preserve award in recognition of its long-standing commitment to developing only LEED (Leadership in Energy and Environmental Design) certified hotels. By the end of 2013, Concord estimates that 25 percent of its 4,626 owned hotel rooms will be LEED certified.
Highly Efficient Buildings
The company also aggressively pursues sustainability. Concord’s new properties consume 20 percent less energy than local building codes require and the company also participates in Clean the World, a global initiative that recycles personal hygiene items that are distributed around the world where hygiene-related diseases are an issue.
According to Laport, Concord stepped up its activity in the acquisitions arena in 2012 with two transactions including the third quarter purchase of the Renaissance in Rutherford, N.J., a property it developed in 2000 and has managed since opening.
“We have not been an active acquirer but are beginning to see a number of transactions that match up well with our business model,” said Laport. “We will acquire opportunistically and simultaneously seek to monetize select assets in our portfolio to reinvest in new development projects and acquisitions. Whenever possible, we will seek to retain management of the divested assets.”
In 2012, Concord grew its base of third-party management contracts by five hotels, a trend it expects to continue in 2013 with the addition of at least another five properties.
In Las Vegas for First Time
“We retained management of properties that we sold, and we added contracts on behalf of relatively new ownership groups that are expanding their holdings,” Laport said. “We already have several new engagements teed up for 2013, pending closing, which will bring our operations westward to new markets like Las Vegas and increase our number of hotels in markets such as Phoenix. We also are working with a number of sophisticated institutional investors who plan on additional acquisitions in 2013.”
Laport said that Concord intends to continue to provide 35 to 40 percent equity in its development projects, thereby attracting attractive financing and well-qualified partners.
“We are in the enviable position of being able to attract capital, because we are prudent, conservative investors,” said Laport. “Recently we received six term sheets to finance a new development project. The equity was oversubscribed by more than 100 percent. I view that as a testament to the quality of our projects and our guarantee of completion and effective management post-completion. Our level of financial and operational commitment resonates with investors who would prefer to co-venture with a partner that’s guarding their investment.”
“2012 was an exceptionally good year for us,” said Laport. “On average, our U.S. hotels realized RevPAR growth of more than 7 percent and we grew RevPAR Index, outperforming our comp set for the fourth consecutive year. As a company, we achieved revenues in the $400 million range, a record for us, and at our current pace, I expect that it won’t be long before we hit $500 million.
“These achievements have enabled us to promote several key executives to positions of greater responsibility and create more opportunity for existing staff,” he added. “In the coming weeks, we’ll be announcing several promotions. For the year, we expect to add more than 700 new positions at our current and planned properties.”
Go to Concord Hospitality.
