The Leading Trust: Investment-Driven Road Map Toward Full-Fledged Hotel-Company Status

NEW YORK— The Leading Trust— a newly formed real-estate investment vehicle managed by Leading Hotel Fund Advisors, a partnership between affiliates of The Leading Hotels of the World Ltd. and New York-based Trinity Hotel Investors LLC— is shaping up to be more than “just” an entity designed to invest in luxury hotels. In point of fact, the new venture looks to be a gambit that’s right on the money… to the benefit of those lodging properties it encompasses. Specifically, it was noted that— with the formation of The Leading Trust— The Leading Hotels of the World has apparently signaled it will take a “pro-active role in protecting its member hotels by providing them access to capital for improvements or major renovations.” To this end, The Leading Trust offers services for luxury hotels ranging from sliver equity, outright purchase, partnership options and share swaps to asset-management and capital-advisory services. Along the lines of its primary mission, the acquisition of hotels by The Leading Trust is said to be the culmination of a five-year business plan for Leading Hotels to evolve from a hotel-representation organization to a full-service provider of products and services to the luxury hotel market sector. As such, it was reiterated The Leading Trust is designed to invest in luxury hotels in order to preserve their distinct cachet, history and charm. According to Leading Hotels of the World President/CEO Paul McManus, during its first phase, The Leading Trust is expected to raise nearly US$300 million. What’s more, thanks to a core of “programmatic investors,” he said the trust is in a position to buy (into) hotels as the opportunity to do so arises. As for the caliber of properties on the entity’s radar screen, McManus noted: “By and large, our targets are hotels in the five-star market… in other words, lodging properties reflecting the make-up of Leading Hotels’ membership.” As such, it was noted future acquisitions are expected to be along the lines of The Leading Trust’s first purchase— the Cadogan Hotel in London. It was further pointed out another six – seven such transactions are currently in the works, and are expected to close within the next four months or so. The Leading Trust is ostensibly set up to provide member and non-member hotels worldwide an opportunity to preserve their character and protect them from forced sales to multi-national chains. At this time, it was contended The Leading Trust will initially focus on acquiring hotels in Europe, and operational management for the Leading Trust’s owned hotels will reportedly be awarded through an RFP process led by Leading Hotel Fund Advisors. “The Leading Trust provides a solution for hotel owners to sell or upgrade their properties, while preserving the market position of their hotels,” said McManus. As he theorized: “Owners may not be amenable to bringing on an unknown equity partner or selling to a faceless brand. We provide the optimal solution for the luxury hospitality sector.” Interestingly enough, it was similarly suggested the close working relationship Leading Hotels has with its members could well set the stage for deal-making virtually internal in nature… thereby beating the brokerage community to the punch and acquiring the property before they’ve had a chance to work their marketing magic and push the price upward. The Leading Hotels of the World— founded 75 years ago— is a luxury hospitality organization representing more than 400 of the world’s high-end hotels and resorts, while Trinity Hotel Investors is a real-estate investment company focusing on global hotel and resort investments.