There are more signs this week that big money and hotel investment activity is picking up and will begin to add to more reductions of distressed hotel real estate inventories going into late 2010, according to Perry Group’s Hotel Asset Manager and Hospitality Asset Management specialist. After going dark for most of 2009, hotel sector big deals are starting to make headlines. The new deal-making cycle that is kicking into gear appears to be led mainly by REIT activity. With debt still constrained, the private equity firms requiring leverage to consummate transactions have often been outbid this year by REITs willing to make all-cash offers for these special hotel investment assets. Read more… There were also significant hotel acquisitions by REITs among them Chatham Lodging Trust in mid-year 2010 according to a related article, say Perry Group’s Hotel Asset Manager and Hospitality Asset Management specialist. Read more… Added to the mix of hotel real estate sector activity is the announcement this week that $400 million of bad hotel bank loans are going to auction. The two-day online auction starts Nov. 1 and is run by a partnership between Jones Lang LaSalle and REDC. Read more… At the same time, some hotel consulting services firms, including this Hotel Asset Manager, are expressing concern that the improving fundamentals in the hotel sector, namely RevPAR, could begin to slip again if unemployment and slower corporate business travel continue into early 2011. If that is the case, hotel real estate investors should allow for another 12-24 months of flat-to-low returns on any hotel investments made now.
Perry Group
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