There is a lot of talk among investors and their hotel asset manager that acquisitions in distressed real estate of the U.S. hotel sector will rise this year. Still, the focus continues to be on the luxury, trophy class of hotels in primary markets when and where these become available. Hotel High Net Worth InvestorAccording to different reports over the last several months, most of the hotels either with non-performing loans or facing foreclosure are predominately in the limited and full-service segment. These properties are primarily in the secondary and third tier marketplaces, not major cities. This is also the segment whose industry fundamentals, such as improving occupancy and average room rates, have improved slowly or barely at all. Hence, the likelihood that banks and special servicers will take back the property so as to sell the hotel to recover their loan may stall more. A hotel asset manager is more likely to recommend to either the lender or investor that everyone wait until the economy gains more steam, such as in California where reports of more distressed hotels get a lot of press. This appears on the surface a good move from a valuation standpoint, since hotel real estate is typically appraised using the income approach. However, from our vantage point working with banks, high net worth investor and private equity groups and their hotel investment advisor, the acquisition phase for distress is best begun sooner than later before cap rates decline further. Are you an investor or hotel asset manager on the hunt for distressed hotels? If so, what do you see in terms of the types of hotels and in what U.S. markets are those coming available that had not been seen previously??