cap rates

/Tag: cap rates

cap rates

Hotel Cap Rates Hold Steady - Values Under Pressure

Suzanne R. Mellen | January 17, 2019

By Suzanne R. Mellen Following a year of robust transaction activity, hotel capitalization rates remain stable, while hotel NOI and values are under pressure due to slowing RevPAR growth and increasing operating expenses. This article looks at hotel sales and capitalization rate trends, the impact of slowing RevPAR growth on hotel values, and the outlook for 2019. [1] With a more business-friendly administration in place and the passage of the Tax Cut and Job Act (TCJA) in December 2017, the outlook for the economy and hotel performance became brighter in 2018. Hotels generate higher returns than other commercial real estate and reflect...

Impact of Countervailing Forces on Hotel Values and Cap Rates

Suzanne R. Mellen | January 24, 2018

By Suzanne R. Mellen After more than five years of relative stability, new factors are at play in the hotel investment market that will affect hotel capitalization rates and values in a changing economic landscape. Hotel sales transaction activity declined in 2017, while cap rates continued to rise modestly, and hotel values held stable. The outlook for 2018, while uncertain because of the changing political and economic landscape, is more positive than a year ago due to the tax reform's favorable treatment of commercial real estate and a more optimistic business environment. This article presents recent trends and a sensitivity analysi...

Positive Operating Leverage Results in Another Year of Hotel Value Gains; Cap Rates Start to Rise

Suzanne Mellen | January 25, 2016

By Suzanne Mellen Five years of steady cap rates and rising NOI have resulted in significant U.S. hotel asset appreciation. The current economic landscape is likely to cause hotel cap rates to rise in 2016, moderating future value gains. Click to view document. ...

Steady Cap Rates Support Strong Hotel Value Gains

HVS | January 30, 2015

By Suzanne Mellen, CRE, MAI, ISHC, FRICS Hotel values reached new peak levels in 2014, fueled by stellar hotel performance, and the availability and low cost of capital. Capitalization rates held steady as competition for quality assets remained strong. This article discusses these forces and presents data illustrating these trends. The strong performance of hotel assets continues to attract capital to our industry. Hotel values reached new peak levels and capitalization rates remained steady in 2014, fueled by hearty net income increases and a plethora of low cost, yet still disciplined, capital. This article, which is published bienni...

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