Host Hotels & Resorts announced in August that it was selling close to $400m (£256m) worth of shares, under an arrangement it has with BNY Mellon allowing it to raise money "from time to time".
The cash will be used to continue the Reit's acquisitive streak this summer, which has seen it buy the Le Méridien Piccadilly for £64m and the Westin Chicago River North for $165m. It also led a joint-venture acquisition to take the W New York Union Square out of bankruptcy.
Host is seeking to take advantage of its cash-rich position to buy properties in a market where it has reduced competition for assets from other existing and potential hotel owners. The group's recent deals have been representative of what has become a summer of mergers and acquisitions across a wide range of sectors.
The group's deal with Starman marked an end to almost two years on the market for Le Méridien Piccadilly, which was originally marketed in 2008. A deal was prematurely announced at the IHIF in Berlin before being retracted and the agents changed. The sale, including the assumption of a £33m mortgage, was some way off the £90m the site was originally thought to have been offered at.
The hotel has also been recently refurbished – completed at the end of April – which is thought to have been a factor in earlier failures to effect a sale.
Host has a history of acquiring sites owned and/or operated by Starwood Hotels & Resorts, having changed its name from Host Marriott in 2005 after buying 38 hotels from Starwood, believing the name better reflected its more diversified portfolio of hotel brands.
Starwood itself is eager to sell again, with Vasant Prabhu, the company's CFO, commenting in late August that it expects to sell "a lot" of hotels in a few years' time, once the transaction market has recovered.
Prabhu added that the group was in no rush to sell and planned to make the disposals at "good values on long-term basis". The move would mark a refocusing on the group's asset-light strategy.
With the future of the transaction market seemingly assured, the present sees supply rather more limited, even for those with war chests at the ready.
European markets tend to have a very high barriers to entry, which limit future supply growth and allows assets to retain a high value. The US has seen lack of finance create a similar situation, with the total active US hotel development pipeline in July down 26.4% on the year to 3,412 projects, according to the STR/TWR/Dodge Construction Pipeline Report released.
The supply of hotels for willing buyers has been further restricted by the failure of the anticipated flood of distressed properties to break over the market. Unlike the 1990s when the market was awash with stricken properties, as high interest rates hit owners, the current historically-low rates are expected to remain for some time, keeping panic out of sales. Roger Bootle, managing director of Capital Economics, forecasts that they could stay below 1% for five years.
The situation is unlikely to change soon, with only the advent of a double-dip recession hitting occupancy expected to cause pause.
Host, meanwhile, has also been linked to the Grosvenor House Hotel, as one of the bidders entering the final round, in partnership with the Government of Singapore Investment Corporation. The Grosvenor House has been attracting potential buyers since the Le Méridien Piccadilly's appearance on the market in 2008, although has seen its price drop from a rumoured £720m to a more-likely £500m to £550m.
Europe, where hotel property values have held firm in comparison with the US, will see the majority of deals this year, according to a recent study by Jones Lang LaSalle Hotels, which forecast that hotel acquisitions in Europe would total about $5.5bn, compared with $4.5bn in the Americas.
The total volume of hotel investment sales is forecast to jump 60% to $8bn in the second half of 2010 from $5bn in the first six months, as more lenders put distressed hotels up for sale.
Should banks call time on "pretend and extend" and start to sell assets, the forecast increase will take 2010's total hotel investment volumes to $13bn up nearly 45% from $9bn in 2009, but below the peak of $25bn reached in 2008.
London's strong performance throughout the downturn, aided by the weak local currency, has made it particularly attractive to investors.
As a result one deal which looks to be stalling is that of a sale of a third-stake in the Savoy to Qatari Diar. It was reported in The Times last week that, with Bank of Scotland noting the improvements in the trading market in London, it had became reluctant to cut its share as the hotel was on the verge of opening.
Qatari Diar may yet have a chance to build its holdings in London, which include the Shard and Chelsea Barracks, with the sovereign wealth fund thought to be up against Host/GIC for the Grosvenor House.
HA Perspective: A lack of available finance has limited the number of hotels being built as well as those being bought and sold, keeping supply limited. While interest rates remain low the pressure to sell is limited for all those apart from owners who bought at the very top of the market and leveraged high.
But, as the Le Méridien Piccadilly deal shows, there will always be a market for high-end properties in prime locations. While off the historic highs, prices are still proving reasonably robust.