Working in primarily development and debt/equity investments here so haven't done much in the way of hotel acquisitions.
But curious, when you guys are diligencing an operating hotel asset, why or do you spend much time on diligence the historical property operations (staffing, marketing, ops, etc) since aren't you just concerned with the physical asset itself (and adr/occ) and you are not assuming the mgmt agreement and encumbering the asset with another mgmt company, so why spend so much time or do you spend time on historical property operations? It makes sense in the corporate sector and having come from doing LBO capital raises in IBD, no corp PE firm is running the assets they buy so essentially in any LBO historical operations fo the company diligence is necessary since most of the contracts will be assumed by the PE fund, but for hotels, which are operationally intensive assets, if you're bringing your own mgmt company and operations, why diligence the property's historical ops if you're not assuming any of those contracts?
Thx
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