Friday, November 28, 2014
Inquirer Daily News

LaSalle Hotel Properties buys two Philadelphia hotels

The hotel REIT spent $224 million to purchase the Westin Philadelphia and Embassy Suites Philadelphia, both Center City hotels.

LaSalle Hotel Properties buys two Philadelphia hotels

LaSalle Hotel Properties jumped into Philadelphia’s Center City hotel market with two purchases Wednesday, while selling its only Atlantic City-area property.

The Bethesda, Md., real estate investment trust bought the Westin Philadelphia from HEI Hotels & Resorts for $145 million. The 294-room Westin at 99 S. 17th St. is part of the two-tower Liberty Place office, retail, and residential complex.

LaSalle also bought the Embassy Suites Philadelphia - Center City hotel from HEI for $79 million. The 288-room Embassy Suites at 1776 Benjamin Franklin Parkway had been built as an apartment house in the 1970s.

The transactions leave Norwalk, Conn.-based HEI owning just one hotel here: The 202-room Le Meridien Philadelphia Hotel, which opened in May on Arch Street between Broad and 15th Streets. However, LaSalle said it was retaining HEI as manager of the Westin and Embassy Suites.

The news release issued by LaSalle gushed over a third purchase - its first hotel in San Francisco, the Hotel Monaco, for $68.5 million - and contained details of the two Philadelphia properties. But the statement only briefly noted the sale of the Seaview Resort in Galloway Township for $20 million and didn’t identify the buyer.

But Richard Stockton College of New Jersey issued its own statement about its purchase of the 300-acre property with a 297-room hotel and two golf courses. College president Herman J. Saatkamp Jr. called it “a historic day for Stockton and all of southern New Jersey.”

Given that LaSalle paid $50 million for Seaview in 1998, the REIT’s management was probably feeling less jubilant.

August clunker

All streaks come to end, and so one did for Subaru of America Inc. when it reported lower August sales compared with the same month last year.

Subaru posted higher sales for 13 straight months until the recent August lull broke the trend. Of course, Subaru’s August 2009 sales of 28,683 were an all-time best, fueled by a federal “cash for clunkers” program. So it shouldn’t have come as a surprise that Subaru and other automakers were going to have a tough month compared with the stimulus-fueled giddiness of last year.

Cherry Hill-based Subaru, a unit of Fuji Heavy Industries Ltd. of Japan, reported sales of 22,239 vehicles, led by its Outback model, which accounted for 8,053 of those sales.

That’s a 22.5 percent decline in total sales from August 2009 and a 7.3 percent decline from July 2010.

However, year-to-date sales for the automaker remain higher than they were in 2009. Subaru sold 172,182 vehicles for the first eight months of 2010 compared with 143,828 for the same period last year.

Sales streak ends

Another local company also had a streak end, but one that it won’t miss.

Charming Shoppes Inc., the Bensalem operator of the Lane Bryant and Fashion Bug women’s apparel chains, reported a 1 percent increase in comparable-store sales for its second quarter. (Comp-store sales measure only those stores that have been open for at least a year.)

Not very impressive? Well, the company said it was the first positive increase in comp-store sales in 15 quarters. That’s a brutal stretch of weakness.

Still, Charming Shoppes lost money in the quarter. It reported a net loss of $8.6 million, or 7 cents a share, for the second quarter, compared with net income of $5.0 million, or 4 cents a share, for the same quarter of 2009.

And it’s not getting any easier for the retailer. In March, the company said it would close 100 to 120 underperforming stores this year. Fifteen were closed during the second quarter. It now operates 2,108 stores nationwide.

In June, the company changed the leadership of its Fashion Bug chain, promoting MaryEllen MacDowell to president and hiring Laura Johnson as executive vice president of merchandising and product development. MacDowell replaced Jay Levitt, who left the company.

On a day when the major indexes were flying higher, shares of Charming Shoppes dropped 41 cents, or 12.17 percent, to close at $2.96.
 

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
Business Videos:
Also on Philly.com:
Stay Connected