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Microtel Sale Proves Lodging Transaction Market Still Active
(Denver, CO, Chicago, IL; Onalaska, WI): May 21, 2009 - The recent closing of the 63-unit Microtel Inn in Onalaska, Wisconsin was handled by Larry Kaplan, Senior Vice President in HREC Investment Advisors� Denver office and Jeff Preston, Vice President in the Chicago office. �The Microtel Inn sold five weeks after the initial execution of the purchase agreement, which is an extremely short period of time in the current economic environment. We have found that a large pool of potential buyers exist for hotel transactions under $10 million. Local and regional banks continue to provide loans for smaller hotel real estate transactions,� said Larry Kaplan. �We currently have two additional hotels under contract in the upper Midwest, with a third hotel expected to go under contract shortly. All three of these hotels are priced under $10 million and each has received significant interest from the investor community. While valuations are off their peak level achieved in 2007, savvy buyers understand that 2009 represents an amazing buying opportunity for properties that are priced appropriately by sellers,� continued Larry Kaplan. �We have seen the value of larger, full-service hotels in primary markets decline by up to 40% in the last year. However, smaller limited-service hotels in secondary markets have in most instances not experienced a loss in value anywhere near that level. Revenue declines in 2009 are in the low single digits in many cases for these smaller hotels, versus the 20% to 25% decline experienced for larger urban hotels,� said Jeff Preston. Larry Kaplan concluded, �We have an active database of aggressive hotel buyers who have the track record in the industry to secure acquisition financing in this challenging environment. Selecting the right buyer group is the key to a successful transaction. The experienced, well-capitalized groups can still get deals done, while the inexperienced fringe players are not able to secure financing at this point in the investment cycle.� The Microtel is located along Interstate 90, in a suburb of La Crosse near the University of Wisconsin - La Crosse and Gundersen-Lutheran Hospital. The property is also within driving distance of Fort McCoy military base. The hotel was sold by Larson Investments, LLC to a local multi-unit hotel owner. This is the fourth hotel transaction completed by Larry Kaplan for the Larson Companies. About HREC
For additional information, visit HREC�s website
at www.hrec.com.
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Contact
Larry Kaplan
Senior Vice President HREC Investment Advisors 6400 S. Fiddler�s Green Circle Suite 1730 Greenwood Village, CO 80111 (303) 267-0057 ext 113 [email protected] |
Jeff Preston
Vice President HREC Investment Advisors 445 N. Wells St. Suite 402 Chicago, IL 60610 (312) 645-9010 [email protected] |
Mike Cahill
CEO & Founder HREC-Hospitality Real Estate Counselors 6400 S. Fiddler�s Green Circle Suite 1730 Greenwood Village, CO 80111 (303) 267-0057 ext 101 [email protected] |
Also See: | 2009's Top 10 Hotel Investment Trends and Challenges Released by The Lodging Industry Investment Council (LLIC) / May 2009 |