"There are so many exciting opportunities in China in tier one and tier two markets and there are virtually no other American hotel developers and owners looking in the market," he says.
From its stateside perch the company has been pursuing opportunities in China, he adds: it is in advanced negotiations for two five-star hotels located in tier-one and tier-two cities with an aggregate value of $50 million. BPG expects to close on the cumulative 500-keys within the next six months, he says.
BPG is also in talks with a few large American franchisers to run the hotels once they are acquired.
Negotiations as well as further sourcing of investment opportunities is expected to become much easier once the firm has a local presence. BPG is currently in final lease negotiations for the building it wants to occupy, Buccini says. Initially, it will have four people staffing the office.
Valuations can be tricky business in the hotel industry even in home markets. China's market is equally as complex and sophisticated as the US or Europe, Buccini reports, but it has a familiar feel to hoteliers. "They use the same metrics and performance benchmarks. We have not had any problems with underwriting and due diligence as a result."
BPG is not alone in its desire to seek out opportunities overseas. China, not surprisingly, is a favored destination. As one example, the country will be a major focus for ProLogis for the next four years.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
