Real Estate and Revenue Management
Project title: Kerstone Group
Course: Property Asset Management
Due date: Report:Week, October 21nd, 2015
Presentation: Week 15, Thursday, November 5th, 2015
The project is to make a recommendation on a course of action for the real estate property, especially a recommendation onconversion to a hotel property, (re)position, (re)branding, valuation, and financing strategies.
Learning Objectives: At the conclusion of this project, the student will be able to:
- Evaluate various equity financing vehicles and analyze different owners’ motivations for the investment in hospitality real estate properties.
- Examine the asset managers’ roles in creating value in contexts of the property and the portfolio.
- Apply various valuation techniques for the estimation of the property value.
Specific Objectives: Upon successful completion of the project, you will be able to,
- Identify and examine unique characteristics of hotel property, in particular, in a context of the property conversion.
- Identify and analyze factors to be considered upon valuing the hotel property.
- Examine various strategic alternatives for the hotel property in a disposition phase: repositioning strategies,(re)branding, and (re)financing decisions.
- Investigate alternatives for hotel operation.
- Develop an asset management plan for the hotel property owners.
Organization & Methodology:
As a part of an ongoing expansion strategy, the Kerstone Groupadded two new properties ontoa portfolio of 50 hotel properties: two existing properties – one is located at 10 – 12 Rue L’Amiral Hamelin, Paris and the other is located at 13 Rue de l’Abreuvoir, Courbevoie. Mr. Laurent Gad, the CEO of Kerstone Group, has retained your group to make recommendations on the two newly purchased properties with respect to a conversion to a hotel property, reposition and branding strategies, valuation, and financing decision.Mr. Gadneeds a detailed analysis on two properties in order to determine the details of the conversion, positioning, branding and financing opportunities.
Mr. Laurent Gadasks you to focus your analysis on the following issues:
- Is the repositioning of the newly purchasedproperty as an upscale lifestyle hotel a viable strategy, given the economic and industry environment and the complexities and risks involved?
- Should the property be independent or branded? If branded, which chain and which brand strategy would be the best for the property?
- Option I – Independent
- Option II – Chain affiliation and which brand among various brands offered by IHG or Marriott or Starwood?
- Whichof the following operating agreements would be the best under the chosen brand for the property?
- Strategy One: Franchise
- Strategy Two: Management Contract
- Which financing strategy would be the best for the property?
- 100% Equity Financing
- Equity and Debt Financing
- Debt Financing: Fixed Interest vs. Adjustable Rate Mortgage
- What would be additional concerns and issuesMr. Laurent Gadshould face with the recommended course of action?
To present in a clear and concise manner your findings and conclusions resulting from the analysis you have conducted.
- Introduction including the Summary of key Factors and Facts
- Findings of Major Topic Area
II.1. Conversion(Reposition) as a Hotel Property
II.2. Brand Strategies
II.3. Operating Agreements
II.4. Financing Strategy
II.6. Any other Concerns and Issues
- Conclusion: Recapitulation (Key Summary)
Other Important Considerations:
- The information provided in Appendices is only for more details. If the contents of the information presented in the Appendices are important, they need to be integrated in the main text in a summarized format. Further, Appendices need to be referred to in the main text. However, the contents of the Appendices cannot be graded and they will not have effects on the grade of the report. Please make sure that all relevant data and analysis are included in the main report.
- Your work is graded based on a hard-copy of your report, which is handed in at the reception. In addition, you are required to hand in your report on TurnItIn.
- Cover letter should be addressed to a specific individual and written to that individual on his or her level of comprehension.
- APA referencing style is carefully followed.
- Profession appearance: business report format, clear and distinct sections with topic headings underlined, grammatically correct, no spelling errors, typed, easily readable type size and spacing, reasonable margins and spacing between paragraphs, appendices titled and documented in the letter.
- Limited in length: 10,000 words for the Asset Management Plan.
- Turn in on time.
- Academic integrity stipulates that your work must be your own. Therefore, the development of your appendices, the analyses and interpretation of data, and the writing of your report must strictly be your own work.
Denton, G., Raleigh, L.E. & Singh, A.J. (2009). Hotel Asset management: Principles & practices (2nd ed.). Lansing, Michigan: American Hotel & Lodging Educational Institute.
Assessment Criteria & Weighting:
- The Form and Style of Presentation
- White Paper, A4 size
- One side of the paper only to be used
- Typed in single spacing, 12 font size, including appendices
- Pages must be numbered
- The grading of this report will count for 60% of the total grade. The written report is 70% of the project grade and the presentation is 30% of the project grade.
- CD: The written report (both the group report and the individual report), all relevant referenced materials, excel sheets, and the PowerPoint presentation need to be burnt in CD, which needs to be handed in after the presentation on Week 15, Thursday, November 5th,2015. If your group fails to turn in the CD, your group grade can be penalized (downgraded) by 2 points out of 10.
- White Paper, A4 size
Assessment Weighting: Written Report: 70%
- Introduction (5%)
- Finding of Major Topic Areas (60%)
- Conclusion (20%)
- Presentation and Referencing Style (15%)
Assessment Weighting: Presentation: 30% (Individual Assessment in a Group Presentation)
- Personal presentation (dress code, mannerisms, pace of delivers, clarity of speech, use of materials)
- Creativity in the staging of the “presentation” (“wow” factor)
- Team work in presentation itself
- Time management
- Synthesis of the submitted report or artifact into the presentation
Common Skills developed/Assessed:
|MANAGING AND DEVELOPING SELF||1.Manages own role and responsibilities||2.Manages own time in achieving objectives.|
|4. Transfer skills gained to new and changing situations and contexts.||5.Uses a range of thought processes|
|WORKING WITH AND RELATING TO OTHERS||Treats others’ values, beliefs, and opinions with respect|
|Relates to and interacts objectively with individuals and groups||Works effectively as a member of a team|
|9. Receives and responds to a variety of information||10.Presents information in a variety of visual forms|
|11.Communicates in writing||12. Participates in oral and non-verbal communication|
|MANAGING TASKS AND SOLVING PROBLEMS||13.Uses information sources||14. Deals with a combination of routine and non-routine tasks||15.Identifies and solves routine and non-routine problems|
|16.Applies numerical skills and techniques||17.Uses a range of technological equipment and systems|