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LaSalle pampers stock analysts despite 1Q loss Hotel Sax owner optimistic about summer demand 28-Apr-09 – Despite a net loss for the first quarter of 2009, the real estate investment trust that owns Hotel Sax and commercial property at Marina City is doing better than expected and recently raised millions of dollars by selling new stock. LaSalle Hotel Properties is reporting a quarterly net loss of $18.9 million. During the same period last year, the REIT lost $14.8 million. However, when such items as depreciation are added to net income, the company, which had been expected to make only $409,000, ended up making $8.6 million. This impressed Wall Street. Last Thursday, shares of the public company jumped 20 percent in afternoon trading to $11.12. Shares were trading at $10.75 on Tuesday. In the past year, the company’s common stock price has been as low as $3.57 and as high as $34.45. Stock analysts are impressed with the company’s aggressive cost-savings actions, as a sharp drop in demand challenges the hotel industry.
During a recent conference call with analysts, LaSalle CEO Jon Bortz said the convention business in Chicago is not encouraging. “I do think we are probably more likely to see some benefits from the relative strength of leisure [travel] and the strength of Chicago, particularly in the summertime market.” Like most of the hotel industry, LaSalle is seeing fewer guests and making less money on each available room. During the first three months of the year, occupancy at hotels owned by LaSalle was 60.4 percent. Still, Bortz says they are seeing some early signs of stabilizing demand. In addition to Hotel Sax, the Maryland-based company owns the 752-room Westin Michigan Avenue and 29 other upscale hotels. Analysts believe LaSalle is in a good position to acquire more high-quality hotels in 2010 from distressed sellers. Last Wednesday, the company announced the underwriters of its stock offering had exercised an option to acquire additional shares. This will raise $119.4 million, which LaSalle will use to pay off some of its $966.1 million in outstanding debt.
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