We are looking to sell three hotels in the northeast. One of the hotels has drawn positive offers, but the other two have not gotten the response that we had hoped for. We are open to all possibilities, including holding onto all three properties. What would be the advantages or disadvantages of trying to sell the entire portfolio to one buyer?
Answers
With no information, it is impossible for me to give you a meaningful answer. Three is too few properties to gather attention as a portfolio sale as a general matter.
There are many factors which would determine the best strategy. One would be total price: if one asset's price is very low or very high, it would skew the interest of potential bidders for the asset. Hotels are quite management intensive, so a small hotel or one at a low price will not attract a good number of buyers who will not look at a deal below a certain price. In general, a portfolio would attract more interest in most cases, but if one of the hotels has a lot of negatives, it may have too much of a negative effect on the entire portfolio so that it may be best to sell those that don't detract from overall value, and try to "fix" the problems with the weak asset.
Portfolios can come at a discount or a premium depending upon the makeup of the assets. Feel free to contact us directly for more information.