Say your building stands on land that is sold. What happens?
Paul Kapiris, CBRE Director Operational Real Estate, Hotels – Investment Properties says:
“Operators will generally have a right to continue to operate the hotel without disturbance, regardless of any transfer of the freehold.
“For owner-operators, transferring out the freehold is an elegant solution to unlocking the equity value inherent within the freehold element of their holdings. We are seeing an increasing number of investors explore transfer of the freehold through a myriad of options, be it; ground leases, income strips, operational leases (sale and lease back), and management agreements (sale and manage back).
There are of course options that enable the owner-operator to transfer the freehold, only to have it return to them at the end of a period. This is particularly appealing for intergenerational wealth preservation owners.”
In London, COMO Metropolitan stands on land at Hyde Park Corner that is part of an area bought this month by DTZ Investors for £70 million (DTZ Investors was advised by CBRE) – the parcel also includes Claremont gaming. The seller, Genting, paid £40 million for this package in 2013… which just goes to show that there IS money to be paid in land underneath your property.