2Q results encouraging for LaSalle

23-Jul-10 – Revenue per available room, an important indicator of how well a hotel is doing, is up from last year at the real estate investment trust that owns Hotel Sax and commercial property at Marina City.

LaSalle Hotel Properties announced on Wednesday that its revenue-per-available-room increased 7.4 percent in the second quarter to $146.60. Occupancy at its 32 hotels nationwide was up about five percent to 79.1 percent and the average daily rate increased to 2.1 percent, something company officials found most encouraging.

“The combination of continued strong demand and the recent improvement in average rate,” said LaSalle president and CEO Michael Barnello, “give us confidence that we are in the beginning phase of what we expect to be a strong and long recovery.”

Still, expenses were up and net income for the quarter was off about $200,000 from a year ago, to $8 million. For the six months ending in June, LaSalle had a net loss of $17.8 million. The company expects to lose $20 to $30 million this year.

Floors at 330 North Wabash will sit tight for now

During a conference call with investors on Thursday, LaSalle president and CEO Michael Barnello said LaSalle is still not ready to develop the 12 floors it purchased in 2008 at 330 North Wabash, across State Street from Hotel Sax.

Fast-track development of a 334-room luxury hotel slowed to a normal development schedule and then was temporarily suspended in April 2009.

“Our perspective is that we have investment in the asset, the model room is ready, the floors are vacant and cleaned up and ready to build, but we are not ready to pull the trigger on starting a development there yet.”

He says Chicago is just starting to show signs of increased demand and they would first like to see “significant rate growth” before resuming construction. But with much of the work already done, development of the hotel, says Barnello, could take just 12 to 15 months.

“So we don’t have to make the decision guessing what the next three years look like. We’ll have to just guess what the outlook is for the next year or so.”