Five Arizona hotels, including Tucson El Conquistador Golf & Tennis Resort and the Arizona Biltmore Resort & Spa in Phoenix, will be sold in a $6.6 billion national deal that ranks as one of the largest hotel transactions this decade.

CNL Hotels & Resorts Inc. of Orlando is liquidating its assets, and eight of its most notable properties are going to New York-based Morgan Stanley Real Estate, including the two top resorts.

Long an Arizona landmark, the Biltmore opened in February 1929.

Ashford Hospitality Trust Inc. is going after an additional 51 of CNL’s properties, including the JW Marriott Desert Ridge, Arizona’s largest and one of its newest resorts.

The deal is set to close in the second quarter of this year.

Hotel real estate is a hot commodity across the United States, because travel is strong and lodging revenues continue to grow, said David Loeb, a senior research analyst and managing director who tracks lodging real estate for Robert W. Baird & Co. in Milwaukee.

Several factors have conspired to boost hotel real estate. For starters, the lodging industry posted phenomenal double-digit growth as it recovered from major setbacks after the Sept. 11 terrorist attacks.

Those kinds of gains always attract investors, Loeb said.

Even though occupancy is expected to flatten this year, room rates will continue to rise. Also, investors are turning away from the bond and equity markets and looking to real estate for profits, he said.

“Morgan Stanley, themselves, have been major buyers of real estate over the last year,” he said. “Hotels offer one of the more attractive investment opportunities, because there’s still a lot of earnings growth ahead.”

Morgan Stanley does not comment about deals until they are final. A company spokesperson, who did not wish to be identified, noted that hotel investments are considered a good bet, because group and leisure travel is strong, hotel customers are hearty spenders and the supply is constrained.

Also, the U.S. dollar is weak, which will entice foreigners to travel here and persuade budget-conscious Americans to vacation domestically.

Neither acquiring company would comment about what changes can be expected for the individual hotels. Analysts predict that Morgan Stanley will invest in its properties and try to sell them in a few years. Ashford is expected to sell off some properties when the deal goes through but retain most of them for a while.

Source: www.tucsoncitizen.com

This entry was posted on Tuesday, January 23rd, 2007 at 10:34 pm and is filed under Real Estate, Resort. Tags: America Arizona Arizona hotel Ashford Ashford Hospitality Trust Ashford Hospitality Trust Inc. CNL Hotels hotel real estate Hotels JW Marriott Leisure leisure travel Marriott Milwaukee Morgan Stanley Morgan Stanley Real Estate New York Occupancy Orlando Phoenix Real Estate Resort Travel Tucson United States . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.