Practice/Industry Group Overview
Sutherland is where hospitality checks in for help navigating global development and business growth no matter how hospitable the economic climate.
Sutherland helps hospitality clients grow their businesses in an ever-changing industry. We know the significance of average daily rates, revenue per available room (RevPAR) and the RevPAR Index and what it takes for our clients to keep heads in beds while navigating the complexities of global development and fierce competition. Leisure travel and business travel present challenges—both are subject to dynamic changes in hotel supply, operating cost pressures, changing demographics, shifting international travel patterns, online distribution costs, recruitment and retention challenges, emerging market issues and increased international branding and development. Sutherland is ideally suited to help hospitality clients thrive as they manage these realities. Our attorneys—including former in-house leaders from major ownership, management and branding companies—represent leading hotel and resort owners, operators, managers, developers, franchisors and lenders throughout the world. Our hospitality practice has a particular focus on global growth by expansion and acquisition.
Hospitality clients benefit from Sutherland’s interdisciplinary approach, which includes intelligence from hospitality, franchise, management, real estate, operations, trademark, intellectual property, energy and environmental, construction, tax, bankruptcy, employment and litigation lawyers. We help our clients quickly navigate opportunities and issues with a talented team that knows the industry. We understand hotel management and operations, sales, multibillion dollar mergers, acquisitions and joint ventures; private financing transactions; franchising arrangements; and multi-brand global franchising and management.
We bring substantial skill to distressed hotel projects; foreclosures, deeds in lieu of foreclosure and other court receivership actions; sales of loans and real estate owned properties acquired by foreclosure or by deed in lieu of foreclosure; purchase and sale transactions in state insolvency proceedings and federal bankruptcy cases; lender comfort letters; and real estate and Uniform Commercial Code liquidations. We structure and document both domestic and cross-border workout arrangements; advise creditors on troubled projects; counsel hotel lenders, their borrowers, managers and investors; and represent special servicers and providers of debt, mezzanine and equity capital with respect to non-performing securitized hotel loans, collateralized debt obligations and collateralized loan obligations.
Hospitality and leisure depth. Sutherland’s hospitality team anticipates and resolves the issues unique to the industry and partners with clients to successfully complete different types of hotel and resort transactions. We know firsthand the interests of the players at the table and throughout all phases of a hotel project, including capital structure, finance, construction, development, operations, branding and disposition. Our clients include lenders, hotel operators, hotel brands, investors, developers, national and local governments, and taxing authorities. We guide clients through all of their options, helping them achieve their business objectives. In particular, our attorneys possess unique strength in U.S. and international tax laws. More than 80 of our attorneys focus on tax laws and structuring tax-sensitive transactions. We can quickly provide pragmatic advice about which strategies are realistic and will further a client’s short- and long-term tax objectives.
Global relationships. Our attorneys have developed strong relationships with a number of experienced lawyers in countries that are now a focal point of hotel development and investment.
Former in-house counsel. Our team members have substantial in-house experience with leading U.S. hotel ownership, management, franchise and branding companies. We know what matters most to our clients, and all the different interests that make things happen expeditiously in the internal environment.
Industry-leading client base. Our attorneys know the legal and business issues and alternatives, and all of the players, related to franchise and management agreements, for among other brands, Marriott, Hilton, Hyatt, Sheraton, Ritz-Carlton, Millennium, InterContinental, Baccarat Hotels & Residences, Candlewood Suites, Doubletree, Four Seasons, Hampton Inns, Mandarin Oriental, “1” Hotels & Residences, Westin, and Wyndham.
Fast and efficient. Intense time pressures often accompany hospitality real estate and finance deals, acquisitions and joint ventures. We strive to beat, not just meet, deadlines. We pride ourselves on our dealmaking attitude and our ability to work with all parties, including opposing counsel, in a non-adversarial, cooperative manner.
Creative and cost-effective. We take pride in the creativity we bring to this practice, as evidenced by the challenges we have innovatively addressed for our clients large and small.
Geographic reach. We assist numerous clients with hotel projects in the Caribbean region and are steadily expanding our work in Central and South America.
An eye on energy and environment. Our hospitality team has the deep knowledge needed to respond to the hospitality industry’s increased focus on seeking green solutions to hotel design, development and operations. More than 60 attorneys are dedicated to energy and environmental issues, and we pride ourselves on our ability to evaluate risks and then identify creative solutions to the underlying problem.
Thought leaders. Two of our attorneys wrote “Hotel Law,” a leading treatise. Our real estate lawyers are active members of key legal and professional associations, including the American College of Real Estate Lawyers, the American College of Mortgage Attorneys, the Urban Land Institute and national, state and local bar association sections and committees.
Nuts and Bolts
- Hospitality industry
- We negotiate management and franchise agreements with most major hotel chains that operate in the United States, Canada, the Caribbean, Central America and Latin America. We understand all aspects of hotel finance and are familiar with the accounting issues unique to hotels. Our hospitality and real estate lawyers work with hotel acquisitions and dispositions, operations, development, bankruptcies and workouts.
- Global development and operations
- Sutherland lawyers represent hotel and resort developers, owners, operators, managers, franchisors, franchisees and lenders in projects throughout the world.
- Hotel development and repositioning
- Development and repositioning of hotels and resorts present a unique set of challenges. For many projects, a complex arrangement of public/private cooperation is the key to success.
- Troubled hotel projects
- We counsel on agreements that minimize the risks and provide a path for seeing a project through difficult times. Sutherland attorneys from a number of practice areas, including real estate, finance, bankruptcy and litigation, have substantial experience with distressed hotel projects.
- Foreclosure, bankruptcy and workouts
- We handle all aspects of bankruptcy reorganizations, including issues related to the use and sale of collateral and the protection of rental income.
- Partnerships and partnership taxation
- We have formed partnerships, limited liability companies and joint ventures to own and operate real estate, and we have guided the documentation and enforcement of inter-partner loans and the exercise of put/call provisions.
- Environmental issues
- In connection with both acquisitions and financings, we assist our clients in obtaining and reviewing environmental site assessments and evaluating recommendations for remedial work. We regularly represent hotel companies and developers in connection with investment and management opportunities throughout the world.
- Real estate
- Sutherland has approximately 30 real estate lawyers. We assist clients in responding to both the challenges and opportunities of the real estate industry, often through innovative and sophisticated approaches that lead to practical and cost-effective solutions. In particular, we offer extensive experience in the integration of hotel components into larger mixed-use resort developments, with a particular focus on golf course and marina use agreements, complex easement agreements, branded residences, and timeshare, vacation club and other shared ownership structures.
- Real estate finance
- We advise both lenders and borrowers in connection with all types of hospitality financing, including construction and permanent loans, multistate financings, leasehold financings, sale/leaseback transactions, mezzanine loans, short-term variable rate financings, participating mortgages, and subordinate and wrap-around financings.
- Acquisition and development
- We are experienced in all phases of the acquisition and development process, from negotiation of letters of intent and purchase and sale agreements through project completion and permanent financing.
- International transactions
- We work regularly on foreign investment in United States hospitality properties, as well as large-scale development abroad by foreign and domestic clients.
- Pension fund investments
- We represent a significant number of pension funds and insurance companies that act as investment advisers and managers for pension funds in connection with real estate investments by those entities.
- We are an industry leader in resolving federal, state and local tax questions, and we bring that leadership to the tax aspects of hospitality transactions and hotel operations. We have extensive experience with occupancy tax and related questions, including the application of this tax to online transactions.
- Our lawyers have spent decades addressing the antitrust aspects of hotel operations on a global scale, including antitrust training and compliance, sales questions, relations with competitors, formation of joint ventures with competitors, franchise sales, procurement and brand standards, and online distribution requirements. We have worked with every major hotel company, joint venture and third-party intermediary.
Successful hospitality projects require a legal team that understands the unique characteristics of the leisure, travel, service, franchise, real estate and finance industries. Sutherland’s exceptional hospitality experience and stellar cross-practice team provide the best possible outcomes for hotel and resort developers, owners, operators, franchisors, franchisees, lenders and investors involved in hospitality projects throughout the world.
Sutherland represents major international hotel brand.
Our attorneys advised a preeminent international hotel brand in multiple acquisitions, dispositions, joint ventures, developments, operating agreements and franchise agreements. Representative transactions included acquisitions and dispositions of hotels in New York City and Puerto Rico, operating agreements for prominent hotels in Los Angeles and Arizona, and joint ventures for the development of landmark hotel projects in Miami Beach and San Francisco.
Sutherland counsels special servicer of major hotel loan portfolio.
Sutherland represented the special servicer in a loan restructure and forbearance involving over $1.9 billion of mortgage and mezzanine financing, secured by a portfolio of 12 U.S. and Caribbean-based luxury resort properties.
Sutherland advises mixed-use resort developer.
Our hospitality team worked with the developer of a multi-hotel, mixed-use resort in Punta Cana, Dominican Republic, in negotiating hotel operating agreements, infrastructure contracts, marina management contracts, golf course management contracts and related agreements.