Labor poses challenge to recovering hotel sector; Blackstone gets $2.7B loan

S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.

The U.S. hotel industry is expected to employ 1.97 million people throughout 2022, 16% fewer compared to pre-pandemic levels, according to the American Hotel & Lodging Association's "2022 Midyear State of the Hotel Industry Report."

A return to workforce levels before the COVID-19 lockdowns is not expected until at least 2024, according to the report. Some 97% of hotels that responded to the association's May 2022 AHLA Front Desk Feedback survey indicated they are experiencing a workforce shortage, with nearly half saying they are experiencing severe understaffing.

Nearly all respondents said they are unable to fill open positions despite offering incentives for potential hires, such as higher wages, greater flexibility with hours and expanded benefits.

Meanwhile, hotel demand continues to rebound. Occupancy is expected to average 63.4% for 2022, approaching pre-pandemic levels. Room revenue is expected to surpass 2019 levels by 11%, at nearly $188.4 billion, the report added.

CHART OF THE WEEK: Canadian REIT capital offerings down 45% YOY in Q2

⮞ Capital offerings by publicly traded Canadian real estate investment trusts pulled in C$1.33 billion in the second quarter, down 45.6% year over year.

⮞ Debt offerings comprised C$1.15 billion of the capital raised.

⮞ Retail-focused Choice Properties Real Estate Investment Trust garnered the largest amount of capital through a senior debt offering, at C$500.0 million.

Financing

* Blackstone Inc. secured $2.73 billion in financing for its $7.6 billion all-cash acquisition of PS Business Parks Inc., Commercial Observer reported, citing public mortgage documents.

* Innovo Property Group obtained a $435 million refinancing package for The Borden Complex industrial project in Queens, N.Y., Commercial Observer reported. The multistory logistics and warehouse property in the borough's Long Island City is scheduled for completion in 2024.

Property development

* Rida Development Corp. and a real estate fund managed by Ares Management Corp. started the development of a resort and convention center in Chula Vista, Calif., to be managed by Marriott International Inc. The roughly $1.28 billion Gaylord Pacific Resort and Convention Center development will span 1.8 million square feet and have 1,600 rooms. The project is expected to open in the summer of 2025.

* Invesco Real Estate Ltd. and IndiCap are looking at developing an industrial campus in Glendale, Ariz., Commercial Property Executive reported. The Virgin Industrial Park project will have more than 1.5 million square feet of industrial space across five buildings.

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