Orlando Area Hotel Transaction Market Explodes In 2015 According New HREC Investment Advisors Study
February 17, 2016 11:09am
(Denver, Colorado; Orlando, Florida) - HREC Investment Advisors has released its comprehensive study of hotel transactions in the Greater Orlando market for 2015. The study covers over 500 hotels located in Orange, Osceola, Seminole, Polk and Lake Counties.
The HREC IA study revealed that a total of 68 hotels changed ownership in 2015, up from 45 properties in 2014.
Demand for hotel rooms in the market in 2015 grew by 6.0% over 2014, clearly outpacing supply growth of less than 1.5%. As a result, occupancy for the region reached 77.0% (up from 73.7% in 2014) and managers were able to push the region’s average daily room rate to $112.00 (up nearly 4.0% YOY).
The top three transactions by sales price were:
With 11 transactions, Kissimmee East was, once again, the most active submarket in terms of the number of hotels that changed ownership; however, the International Drive submarket – which surpassed the Lake Buena Vista submarket – was the most active in terms of dollar volume with $217 million.
In 2015, 12 hotels – accounting for $1.8 billion in sales volume – sold as part of a “Corporate/Portfolio,” transaction, the highest level of Corporate/Portfolio sales during this cycle.
Said Paul Sexton, head of HREC’s Orlando office: “The unprecedented volume of sales in the Orlando area in 2015 solidifies two primary trends. The first – and this will come as a surprise to many – is that we are increasingly viewed as a safe haven for investors at the luxury end of the market. The second – and this will come as a relief to many -- is that, with over 50 hotel sales in our least dynamic submarkets since the beginning of the economic recovery, we are slowly, but surely, seeing a healthy transformation at the lower end of the market.”
Added Scott Stephens, HREC’s COO and Southeast practice leader: “Greater Orlando continues to be one of the most dynamic hotel markets in the country. No other market in the nation is experiencing the level of investment in new demand generators and in the renewal of established attractions than is the Central Florida market. Because local governments continue to increase the tourism inflow bandwidth with transformational airport and roadway improvements, we believe that our nation’s number one tourism destination still has a long runway ahead of it.
Continued Sexton: “Despite continued hotel development at Universal, additions to supply remains well within tolerance levels. More specifically, new guestroom supply has grown by an average of less than 1.0% per year since 2011, after accounting for both the development of new hotels and the closure of older hotels.”
For a copy of HREC’s full report on the Greater Orlando hotel transaction market, please contact www.hrec.com
orlando hotel market
HREC is the nation's leading lodging and gaming real estate advisory firm specializing in property sales, mortgage brokerage, equity/JV structuring, consulting (market studies and appraisals), and litigation support. With offices throughout North America, HREC is distinguished by unwavering commitment to client service and success through its team approach, intellectual capital and hotel/casino specialization.
Contact: Ashley Hunt, Director of Marketing
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