Several hotel investment advisors and hotel investor groups are predicting that real estate transaction volume in the hospitality sector will rise although slowly. Many believe that the combination of improving industry fundamentals and the lack of new development can only add to the motivation to sell. As to lenders holding distressed hotel assets and wanting to clean their balance sheets by 2013, there are more reasons to move their inventory to market now. According to one attorney for a major national hospitality law firm working with banks, investors and their hotel asset management specialists: “The big story since the crash has been lenders holding onto their troubled assets, when in past down cycles they had to write down their underwater loans and push their REO properties through,” says Irv Sandman of Sandman Savrann, a national law firm devoted to the hospitality industry. “The result had been a slow deal velocity that has not been particularly good for buyers, sellers or the economy as a whole. But the market is now improving for traditional buyers – the REIT-driven bubble of last summer appears over; lenders are increasingly pushing assets to market; and momentum is building to ‘come clean by ’13.’” Read more on what other hotel investment advisors believe will transpire this year. In a separate report and what echoes the continued improvements in its hotel real estate portfolio for a major hospitality hotel management and investment company: “LaSalle Hotel Properties swung to a profit in the fourth quarter of 2011, reporting net income of $600,000 against a $17 million loss during the same period a year earlier.” But, will there really be good buys for hotel investors and hotel investment advisors since CAP rates driven by income have yet to rise that significantly? If you are a owner, lender or investor pursuing distressed hotel investor opportunities, please share your experience here.
