Friday, February 02, 2007

Lou Dobbs, scramble your jets! :: Washington Post

Dubai Ports World continues to soak up US hotels:
Lou Dobbs, scramble your jets!

Remember Dubai Ports World, the outfit that almost took control of the nation's biggest ports until Dobbs and his army of xenophobes rescued us?

Well, that same Dubai Ports World, through its subsidiary Istithmar Hotels, has purchased the venerable Hotel Washington, which from its location on 15th Street across from the Treasury offers the best views anywhere of the South Lawn of the White House and the second-floor residence.

I'll leave it to others to determine whether this transaction poses any threat to national security. My concern is whether this and other recent transactions are the harbingers of another bubble in U.S. asset markets, this one involving downtown hotels in major American cities.
The $150 million price for the Hotel Washington works out to about $435,000 per room. But to turn what is now a down-at-heel property into the five-star hotel that Istithmar (that's Arabic for "investment") envisions, and deal with the demands of historic preservation fanatics and myriad local planning agencies, Istithmar will be lucky to bring this baby in below $800,000 a room. As it happens, that's the local indoor record, set last year when Strategic Hotel Capital, a private investment firm, purchased Washington's only five-star hotel, the Four Seasons in Georgetown, following a top-to-bottom renovation.
Thanks to Scott of Hybla for the link.

The Emirates Economist has had much to say on the ports saga in the past. Click the "Dubai Port World" label below for a selection.



Anonymous Anonymous said...

Dear Economist,

I note that the Gulf countries are investing aggessively in foreign assets. I understand that they obviously have a cash windfall from the high oil prices, but they also have developing economies and need to invest much more locally towards utilities, infrastructure, systems etc. To me it seems that they have little confidence in the future of their own economies and prefer asset investments that offer attractive cash returns. I wonder what's your take of this type of behaviour by the Gulf governments.

8:59 PM  
Blogger John B. Chilton said...

In the Gulf there's loads of local investment going on. Sometimes it seems like overbuilding.

Investing at home and abroad is simply diversification.

11:16 PM  

Post a Comment

<< Home