Jones Lang LaSalle Hotels Sees Select Service Hotel Portfolio Sales Doubling in 2012
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Jones Lang LaSalle Hotels Sees Select Service Hotel Portfolio Sales Doubling in 2012
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Category: Worldwide - Industry economy -
Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2012-03-22
Buyers and sellers will capitalize on the sector’s robust recession comeback
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.
Jones Lang LaSalle Hotels’ market-leading select service division focuses on the transaction needs of clients in the mid-tier segment of the hotel industry, ranging from $5 to $20 million in asset value. In 2011 the firm completed more than 115 select service transactions in the United States, spanning nearly 18,000 rooms.
Managing Directors Al Calhoun and Mark Fair lead the Jones Lang LaSalle Hotels Select Service Division. Notable transactions in 2011 include:
A portfolio of six West Coast hotels comprised of 1,245 rooms
A series of non-performing mortgage loans secured by a portfolio of 64 Red Roof Inn 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.
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