Hotel Online
News for the Hospitality Executive


Americas Hotel Transaction Volume to Eclipse 2012 at $18.5 Billion in 2013

According to Initial Results from Jones Lang LaSalle's
Annual Hotel Investment Outlook Report

CHICAGO, Jan. 18, 2013 -- Hotel real estate investors, who unlocked capital and aggressively bid on hotel assets in 2012, are expected to increase their buying activity in 2013.The abundance of equity capital and improving debt markets will support a buoyant market for hotel trades this year. Americas hotel transaction volume for the year is expected to surpass the $17.5 billion that 2012 netted, with a moderate increase to $18.5 billion[i], according to initial results from Jones Lang LaSalle's annual Hotel Investment Outlook report.

The Hotel Investment Outlook report is a forward-looking, global analysis which tracks key factors affecting the hotel investment market. The Americas highlights include:
  • Competition for high-quality assets will push up capital values and drive down yields
  • Strong re-emergence of hotel financing will be driven by CMBS
  • Private equity funds to be the largest net buyers of hotels in 2013
"We expect 2013 to be another strong year for hotel transactions," said Arthur Adler , Americas CEO of Jones Lang LaSalle 's Hotels & Hospitality Group. "The United States remains the world's most liquid hotel investment market which will lead the Americas region to transact approximately 55 percent of the global transaction volume. We should see global volumes top $32 billion this year."

Urban Land Institute's Emerging Trends in Real Estate 2013 report agrees that this year will continue to gain transaction velocity, noting "transaction volume should finally gain momentum as buyers capitulate in the face of strong revenue growth and lenders dispose of more foreclosed assets."[ii]

The Propellers of Debt Liquidity
A strong re-emergence of hotel financing driven by CMBS will propel debt liquidity to its highest level since 2007. CMBS lenders will continue to drive pricing, terms and accessibility. Balance sheet lenders are more selective with regard to asset quality, market and sponsorship, but will continue to provide floating rate structures that are favored by hotel owners. It's expected that hotels will remain a targeted asset class for lenders as they offer high yields, relative to other real estate and fixed income classes, relative to the risk.

"The unpaid balance of hotel CMBS loans with initial maturity dates through 2013 totals nearly $19 billion[iii]. Lenders, and in particular subordinate lenders, have shown an increased willingness to foreclose or exercise other rights and remedies, including note sales. Consequently, 2013 could very well mark the beginning of the long-awaited 'great deleveraging' particularly for hotel assets," added Mathew Comfort , Executive Vice President of Jones Lang LaSalle.

Striking While the Iron's Hot: The Big Buyers
There are several key drivers of deal activity including: availability and cost of capital, changes in supply and demand fundamentals, REIT stock prices, the size of the assets brought to market and the overall hotel ownership composition as more hotels are in the hands of traders verse long-term holders. Jones Lang LaSalle expects private equity funds to be the largest net buyers in 2013 as the funds unleashed more than $6.5 billion of capital into Americas hotel investments in 2012. During the next several years these funds will have a buying capacity with leverage of up to $45 billion for hotel acquisitions. Coupled with REITs, private equity will likely comprise as much as 70 percent of total acquisition volume.

REITs will remain active buyers of single-asset acquisitions or small portfolios of institutional quality hotels in the top 15 markets; however, the exact force of REITs on the market will depend largely on their ability to raise capital when it is accretive to shareholders. On the flip side, private equity funds will be seeking needle-moving bulk investments in either large single assets or portfolios as well as high-yield driven trades in the secondary and tertiary markets.

"Look for the private equity merger and acquisition market to also pick up," added Robert Webster , Managing Director of Jones Lang LaSalle 's Hotels & Hospitality Group. "In addition, Middle Eastern and Asian investors are likely to fund $1 billion in transactions this year as they selectively pursue opportunities in prominent gateway markets like San Francisco, Los Angeles, Miami, Washington D.C. and New York. We also expect several landmark hotels to trade in secondary cities from opportunistic international investors."

Beyond Brazil: Latin America and the Caribbean
Investor interest in quality hotel product extends beyond the United States as Latin America and the Caribbean experience considerable growth. Opportunistic investors and hotel brands with some risk tolerance are looking to Latin America to make strategic plays in key markets where there are viable development opportunities. Mexico's expanding network of branded limited service hotels that cater to the middle class will be a primary growth area for investors. The Caribbean transaction market will be largely driven by resort or stalled projects defaulting loans. In terms of fundamentals, the standout markets will include the Dominican Republic, Jamaica and Aruba. The hotel space in South America will continue to make dramatic transformations as under-supplied countries like Brazil, Chile, Colombia and Peru are increasingly on the radar of intra-regional investors.

Future Looks Bright
Macro-economic pressures have kept a lid on economic growth resulting in slow but steady growth. However, as the future comes into focus growth is poised to accelerate.

"A scarcity of high-quality, performing assets will drive competitive bidding pushing up capital values and driving down yields." Adler added, "Hotel fundamentals will continue to be driven by growing tourism, business and leisure travel in major gateway and convention markets, as well as in resort destinations throughout the Americas. This will result in increased occupancy and stronger pricing power. The United States is expected to experience RevPAR gains of six to seven percent, creating opportunities for buyers and sellers alike in 2013."

Jones Lang LaSalle 's Hotels & Hospitality Group's annual Hotel Investment Outlook report will be broadly released in January 2013. To request a copy of the full report, please click here.

Jones Lang LaSalle 's Hotels & Hospitality Group serves as the hospitality industry's global leader in real estate services for luxury, upscale, select service and budget hotels; timeshare and fractional ownership properties; convention centers; mixed-use developments and other hospitality properties. The firm's more than 265 dedicated hotel and hospitality experts partner with investors and owner/operators around the globe to support and shape investment strategies that deliver maximum value throughout the entire lifecycle of an asset. In the last five years, the team completed more transactions than any other hotels and hospitality real estate advisor in the world totaling nearly US$25 billion, while also completing approximately 4,000 advisory and valuation assignments. The group's hotels and hospitality specialists provide independent and expert advice to clients, backed by industry-leading research.

For more news, videos and research from Jones Lang LaSalle 's Hotels & Hospitality Group, please visit:

About Jones Lang LaSalle
Jones Lang LaSalle (NYSE: JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2011 global revenue of $3.6 billion, Jones Lang LaSalle serves clients in 70 countries from more than 1,000 locations worldwide, including 200 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 2.1 billion square feet worldwide. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse in real estate with $47 billion of assets under management. For further information, please visit

[i] This refers to asset sales and does not include note and loan sales, and deed-in-lieu transfers

[ii] PwC and the Urban Land Institute. Emerging Trends in Real Estate 2013. Washington D.C.: PwC and the Urban Land Institute 2012.

[iii] Morningstar LLC.


Jones Lang LaSalle 's Hotels & Hospitality Group

Receive Your Hospitality Industry Headlines via Email for Free! Subscribe Here  

To Learn More About Your News Being Published on Hotel-Online Inquire Here

Also See: Worldwide Hotel Transaction Volume to Hit $32 Billion in 2013; According to Initial Results from Jones Lang LaSalle's Annual Hotel Investment Outlook Report / January 2013

Jones Lang LaSalle Hotels Latest European Hotel Investor Sentiment Survey Indicates 40% of Respondents Intend to Buy Over Next Six Months / December 2012

Appetite for Quality Hotel Assets in Stockholm Continues into 2013 According to Jones Lang LaSalle's Hotel Intelligence Report Sweden / December 2012

Hungarian Hotel Market is Holding its Own Despite the Country's Economic and Financial Challenges According to Jones Lang LaSalle Hotels' Hotel Intelligence Report / September 2012

Key European Hotel Markets Witness Positive Growth in Trading Performance / July 2012

Transparency in Global Real Estate Markets Increases, Aiding Investors and Occupiers, According to Jones Lang LaSalle / June 2012

Positive Outlook for Hotel Performance in Latin America, According to Jones Lang LaSalle Hotels' Latin America Hotel Investor Sentiment Survey; Markets in Brazil, Mexico, Colombia and Chile Rank Most Optimistic for Investment Outlook / June 2012

U.S. Hotel Transaction Volume Reaches $5.1 Billion Thus Far in 2012; According to Jones Lang LaSalle Hotels' Database Average Price Per Key for Single-Asset Transactions Rises 5% on Full-Year 2011 Levels / June 2012

Hotel Investment Sentiment Strengthens in Europe Despite Uncertainty; According to Survey Conducted by Jones Lang LaSalle Hotels 46% of Cities Tracked Expected to Show Trading Performance Growth in next Six Months / June 2012

Polish Hotel 2011 Market One of the Best Performing in Europe; Warsaw Hotels Posting 8.3% Appreciation in Room Yield Over 2010 According to Jones Lang LaSalle Hotels Poland Hotel Intelligence Report / May 2012

Pace of Branded Hotels’ International Expansion to Reach New Focus and Intensity in 2012 According to Jones Lang LaSalle Hotels; While Brazil, Russia, India and China Remain a Key Focus, New Target Countries Include Indonesia, Malaysia, Nigeria, Turkey and Vietnam / May 2012

EMEA Hotel Investment Market During Q1 2012 Shows Strong Activity in London and Paris; Overall EMEA Investment Volume 39 % Lower than Q1 2011 According to Jones Lang LaSalle Hotels / April 2012

Single Asset Deals Accounted for 60% of Total Hotel Investment Volumes in 2011 Across EMEA According to Jones Lang LaSalle Hotels' Hotel Investment Highlights Report / March 2012

New York City Sets Record with $3.5 Billion in Hotel Transactions in 2011, a 150% Increase Over 2010; Jones Lang LaSalle Hotels Predicts New York Deal Volume Will Continue to Lead U.S. Cities in 2012 / January 2012

Global Hotel Transaction Volume Forecasted to Hold Steady in 2012 with Worldwide Levels to Once Again Reach $30 billion According to Jones Lang LaSalle Hotels Annual Hotel Investment Outlook 2012 Report / January 2012

Mark Wynne-Smith to Become CEO for Jones Lang LaSalle Hotels While Arthur de Haast Steps Up to Chairman / December 2011

Global Hotel Investors’ Appetite to Buy Rises to 18-month High, According to Jones Lang LaSalle Hotels Survey; Top five cities for acquisitions include Stockholm, Copenhagen, Chicago, Milan and San Francisco / November 2011

New Buying Audience Emerges as REITs Pull Back on the Throttle for Hotel Assets; Jones Lang LaSalle Hotels says sellers' window is still open as growth in hotel room rates are expected to outpace inflation / September 2011

Jones Lang LaSalle Hotels Study, Lodging Industry in Numbers – Brazil 2011, Reveals Double-Digit Performance Growth for Brazilian Hotels for Second Consecutive Year / August 2011

Jones Lang LaSalle Hotels Forecasts Global Hotel Investment Volumes to Reach $34.8 billion in 2011; The Americas Registered a 187% Year-on-Year Upsurge with Transactions Totalling $7.4 billion / July 2011

U.S. Hotel Transaction Volume Reaches $4.9 Billion Through May, Triple the Volume for Same Period Last Year Reports Jones Lang LaSalle Hotels; Investors' 'buy' intentions are at six-year high / June 2011

Jones Lang LaSalle Hotels Reports $24.3 billion in Global Hotel Sales During 2010 as Investors Get Back in the Game; Expects Deal Volume to Rise up Another 15-25% Across the Globe in 2011 / January 2011

After the Financial Challenges of 2009, Jones Lang LaSalle Hotels Forecasts a 30 to 40 Percent Increase in Global Hotel Deals; Worldwide Transaction Levels Could Reach $28 to $30 billion in 2011 / November 2010

Jones Lang LaSalle Hotels Arranges the Sale of the Laguna Cliffs Marriott Resort & Spa / October 2007

Jones Lang LaSalle Hotels Select Service Division Closes Radisson Fort Worth North Hotel / January 2007

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch

Home | Welcome | Hospitality News
| Industry Resources

Please contact Hotel.Online with your comments and suggestions.