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1Q loss at LaSalle Chicago still a weak market but ‘worst part of the cycle is behind us’ 22-Apr-10 – The real estate investment trust that owns Hotel Sax and other commercial property at Marina City reported this week a first quarter loss of $25.8 million. It is a bigger loss for the quarter for LaSalle Hotel Properties than in 2009, when it lost only $18.9 million. Earnings before interest, taxes, depreciation, and amortization were $14.8 million in the first quarter of 2010, compared to $21.3 million a year ago. While the company made less money off each available room, it reports occupancy was up 1.4 percent to 61.9 percent.
Based in Bethesda, Maryland, LaSalle owns 32 hotels nationwide, including Hotel Sax and The Westin Michigan Avenue in Chicago. In March, it paid $95 million for the Sofitel, a 237-room hotel in Washington, D.C., two blocks from the White House. Demand trying to catch up with supply in Chicago Chicago continues to be a weak market for LaSalle. In a conference call with investors Thursday morning, Barnello said Chicago suffered from a very poor convention business, widespread discounting, and increased supply of hotels. “Chicago is still experiencing one of the biggest supply increases in the entire country,” he said, “and demand has finally picked up in March in Chicago but was down in January and February.” While Hotel Sax was not included in a list of the company’s weakest properties, The Westin Michigan Avenue was. Despite a “severe drop in the overall occupancy to depths not seen in decades” industry-wide, Barnello is still optimistic about the economy and the outlook for LaSalle in 2010. Rebuilding occupancy and rates is happening gradually, he says, but “will take some time.” “We believe the worst part of the cycle is behind us and that continued improvement and recovery lie ahead.”
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