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News for the Hospitality Executive |
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Mar. 21, 2012 — A steady flow of capital is
expected to continue in the hotel real estate market in 2012 with
increasing investor interest in select service transactions, according
to Jones Lang LaSalle Hotels. Compared to 2011 activity, the firm
forecasts that the 2012 volume of select service hotel portfolio sales
is likely to double.
“The select service sector is the most agile
and resilient of the hotel transaction market. Its demand has
quadrupled in the last 15 years, giving way to growth in the product
offering,” said Al Calhoun, Managing Director of Jones Lang LaSalle
Hotels. “An increase in corporate demand at branded upscale select
service hotels is expected to bolster the performance for the overall
sector in 2012.”
Private equity and institutional investors
will continue to play a significant role in the acquisition of select
service assets. Investors are looking to expand their portfolios at a
national and regional level, and branded portfolio sales are likely to
fare better in the market in 2012. Turn-around hospitality assets in
the today’s marketplace are also likely to face a wide buyer audience.
However, buyers should remain cautious, as franchisors are expected to
require overdue upgrades and capital infusions in the coming year to
keep hotels at brand standards.
“Competitive bidding on auction sales and the purchasing of foreclosures and distressed assets, albeit at a slower pace, will also allow investors to acquire assets at a discount to replacement cost,” added Calhoun. “Overall, the select service sector will
experience a rise in transactions this year as compared with 2011. We
are also likely to see the start of new construction return in 2014
causing a shift in the market dynamics and a new buying pool emerge,”
added Mark Fair, Managing Director of Jones Lang LaSalle Hotels.
About Jones Lang LaSalle Hotels Jones Lang LaSalle Hotels is a global real estate services firm focused exclusively on hotels & hospitality. We provide acquisition and financing advice, valuations, investment sales and asset management for luxury hotels, select service and budget hotels, smaller hotels and pubs, from single assets to large portfolios and mixed-use developments. In the last five years we completed nearly 4,000 advisory and valuation assignments and more sale, purchase and financing transactions than any other hotels real estate firm in the world…worth over $30 billion. With 42 offices in 20 countries, no other firm is better connected. Through our depth and breadth of research and experience we know the market at every level, we know the players and we know how to get results. www.joneslanglasallehotels.com
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| Contact: Paige Steers +1 312 228 2797 [email protected] |