REITs

Today in class two different groups provided deep analyses of REITs in The Pebblebrook Hotel Trust and Hines Real Estate firm.  Today I will be providing an overview of the topics covered in their speeches as well as the main points and factors that stood out the most.

Group 1

The first group spoke on hotels and named a few significant men in the history of their making.  Jon E. Bortz played a large part in the building of the La Salle Hotel and he is well known for his projects on the east coast.  Raymond Martz is the Executive Vice President and Chief Financial Officer of Pebblebrook Financial Trust.  The Pebblebrook portfolio acquired 11 new hotels in this past year and the speakers talked about how the majority of these acquisitions have been in tourist towns.

The property market of this trust is primarily upscale, full service hotels.  The demand for hotels in 2012 is expected to increase around 2% however the supply is only projected to increase about 1% through 2014.

The final member of group one spoke on how higher class hotels are at a great advantage when prices drop.  The rates at higher end hotels decrease first so people swoop in to get a cheaper price at a nicer hotel.  This results in the lower class hotels taking a big hit.

 Group 2

The second group spoke about Hines which is a real estate firm headquartered in Houston, Texas.  Hines was incepted in August of 2009 with an initial offering price of $10/share.

The Hines strategy is to invest in quality properties, manage properties to generate income and realize value through sales of properties, portfolio, a merger or a listing.  The primary focus of Hines at this time is in China, Brazil, India, Russia and Mexico.

They are currently working on their investment arm and continue to push to become one of the biggest REIT's in the industry.  Hines has expert local knowledge which puts them at a great advantage in the real estate market.

My next blog will continue the discussion of REITs and their significance in the market in Texas...