Defining Asset Manager

SAN FRANCISCO, CA— Given the plethora of responsibilities falling under an asset manager’s aegis, Hospitality Asset Managers Association (HAMA) President Bruce Stemerman and the organization’s board demonstrated it is easier to point out what an asset manager is not rather than precisely define what he/she is and does. During the course of an exclusive HAMA board meeting with HOTEL BUSINESS® at the association’s Spring 2003 conference here, Stemerman specifically said an effective hotel asset manager today would do well to be a veritable “jack-of-all-trades,” what with a range of accounting, administrative, human resources and operational tasks demanding the on-site attentions of ownership’s closest ally. In what amounted to the first order of business on this year’s agenda, the HAMA board maintained true asset managers are not to be found among third-party management company employees, professionals from the investment banking/brokerage ranks, franchise company representatives, or attorneys and/or others involved in peripheral industry dealings. “Simply stated,” said Stemerman, “a true asset manager is one whose focus, responsibility and involvement is directly aligned with hotel-ownership interests.” As such, the overriding responsibility of an asset manager is that of property-value preservation and enhancement— always completely in line with ownership’s best interests, he said. In light of today’s economically challenging environment, one might well wonder whether asset management is a function hotel owners can afford. “If anything, asset management is a function today’s hotels really can’t afford to do without,” Stemerman said, adding that hotel asset management is “a real growth industry.” Concurring with Stemerman, the board maintained an efficient, proficient asset manager basically pays his or her own way. Specifically, just one savvy business decision or pertinent action could ostensibly save lodging property owners thousands— if not hundreds of thousands— of dollars. Certainly, that growth has been reflected within HAMA’s own membership ranks, particularly over the past few years as officials for the association reported the organization is rapidly closing in on the 100-member mark. As such, this growing number has come to represent approximately 1,000 hotels, which, in turn, comprise some 300,000 guestrooms nationally— reportedly spanning virtually all major hotel brands. Moreover, HAMA conference turn-outs have apparently been on the upswing as well, with a prime case in point being this season’s gathering at The Fairmont Hotel drawing a total of more than more than 90 attendees. Topping the agenda this time around was a “members-only” session behind closed doors that had Jeffer Mangels Butler & Marmaro LLP Partner Jim Butler— head of that Los Angeles, CA-based law firm’s Global Hospitality Group— offering up insight on the spate of ownership/management imbroglios besetting the lodging industry and the circumstances/conditions leading up to them. Along these lines, it was noted today’s litigious environment finds asset managers increasingly being called upon to represent and defend owners’ objectives in courtrooms as well as in corporate offices and on-site hotel locations. “When a disagreement gets to the litigation stage, that invariably means the working relationship [between owners and managers]has failed,” Stemerman said. Changing over from a legal to a financial track, Sonnenblick – Goldman’s Robert Stiles enumerated a number of points driving the equity investment market Among the contributing elements he cited were: increased liquidity, an industry virtually awash in investment capital; scarcity of attractive product, with picky buyers waiting to pounce on anticipated foreclosures; and tumbling hurdle rates, in line with lower IRR expectations. Factors identified by Stiles as coincidentally raising expectations of this current year seeing the emergence of “the best debt market in a decade” incl