Case Number: 5-410-757, Year Published: 2011
HBS Number: KEL518
Real Estate, Hotel, Entrepreneur, Market Analysis
The Hotel Perennial case puts students in the shoes of Dan Jameson, founder and CEO of a boutique real estate private equity firm called EL Investments (ELI), as he wrestles with the decision of whether or not to acquire the distressed Hotel Perennial, a 194-room hotel on the north side of Chicago, Illinois.
When making the investment decision, Jameson (and students) must consider various factors: What is ELI’s implicit investment strategy, and what are the firm’s core competencies? What are Jameson’s goals for growing ELI, and how might the acquisition of the Hotel Perennial fit with those goals? What opportunities and challenges might ELI face if it decides to acquire the hotel? How much would a buyer likely have to pay for the Hotel Perennial to achieve an attractive return?
In addition to containing a hotel valuation and modeling exercise, the Hotel Perennial case also exposes students to several real estate industry concepts and terminologies, including those regarding the hotel sector, equity sourcing, and distressed investing.
The case material assumes that students have taken an introductory real estate finance course or have relevant work experience.
The case has three primary teaching objectives:
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