Paul Hastings LLP, a leading global law firm, represented the initial purchasers in connection with the initial public offering by FibraHotel on the Mexican Stock Exchange. FibraHotel is the very first lodging and very first sector specific Real Estate Investment Trust (REIT) in Latin America and one of only two Mexican REITS to be utilized in the wake of a comprehensive legal overhaul in Mexico that created the “FIBRA”, a new Mexican investment vehicle, which bears many similarities to the U.S. REIT. The four-times oversubscribed offering involved the issuance of approximately $300 million in FibraHotel’s stock publicly on the Mexican Stock Exchange and internationally pursuant to Rule 144A and Regulation S. The initial purchasers involved in this transaction were J.P. Morgan and BBVA.
Paul Hastings attorneys also represented the underwriters in the very successful IPO and “Re-IPO” of Fibra Uno, the only other publicly traded Mexican FIBRA to date. The FibraHotel and Fibra Uno deals mark the very first uses of the newly created FIBRA investment vehicle, which provides a transparent and liquid vehicle to allow for individual investors, as opposed to a limited number of families, to own and trade in real estate in Mexico. As demand for the FIBRA asset class increases, both inside Mexico and internationally, it is anticipated that this investment vehicle will be cloned by other emerging market countries and quickly become one of the most important publicly traded asset classes for investors interested in Latin American real estate.
The transaction is expected to transform the Mexican lodging industry as it represents the first use of the FIBRA investment vehicle in the Mexican lodging sector and will serve as model for other companies seeking to create hotel-focused FIBRAs. Paul Hastings attorneys, having worked on all of the FIBRAs closed so far, and using their strong real estate and Latin American franchises, are already working on other FIBRA transactions, and the pipeline of FIBRAs, some in the billion plus range, is ever increasing in response to the elevated investor interest in this new and novel asset class.
Latin America practice partners Mike Fitzgerald and Arturo Carrillo led the Paul Hastings team, which also included associate Chad MacDonald and foreign associate Pablo Garza Sada.
