Despite CWI having no track record as yet, W.P. Carey and Watermark have partnered on two hotel acquisitions outside the context of the REIT. In 2005, they repositioned and rebranded the 226-unit Holiday Inn Livonia West in Livonia, MI as a Radisson Hotel & Conference Center, and in 2007 they bought the 280-key Doubletree Hotel Memphis Downtown for $39.3 million, or $140,000 per room. Moreover, Medzigian can call on nearly 30 years’ experience in the sector, having managed some $2 billion worth of lodging properties.

The prospectus spells out the risk factors that frequently go hand in hand with lodging investments at this point in the cycle. Failure of the US economy to improve due to continuing adverse economic conditions, such as a declining GDP, “may adversely affect our ability to execute our investment strategy, generate revenues, attain profitability and make distributions to our stockholders,” the prospectus states. It notes a close correlation between GDP and RevPAR.

Further, although CWI’s principals expect lodging fundamentals to improve in accordance with forecasts by industry analysts, such as PKF Hospitality Research and Smith Travel Research, “there can be no assurance as to whether, or when, lodging industry fundamentals will in fact improve, or to what extent they will improve.” Additionally, the prospectus cautions that “quarterly fluctuations” in operating results may occur as a result of the seasonality of certain lodging properties.

CWI’s investment targets run the gamut of the hospitality sector. They include full-service branded hotels in urban settings, resort properties, high-end independent urban and boutique hotels, select-service hotels and mixed-use projects with non-lodging components. The REIT may also look at opportunities outside the sector.