Hotel transactions in the Americas are expected to hold steady at $15 billion in 2012, according to a new research report from Jones Lang LaSalle Hotels. In 2011, transaction volume grew to $15.2 billion, a 24 percent increase over 2010 volume. “Investors have been closely monitoring the state of the economy and its impact on the hotel investment market,” says Arthur Adler, managing director and CEO-Americas for Jones Lang LaSalle Hotels. “Despite the recent volatility, the Americas region will continue its positive momentum in 2012, and hotel operating performance is expected to improve, driven predominantly by increasing room rates.”
The report also notes that during 2012, differences in the buyer audience will emerge as REITs pull back and private equity, institutional, and offshore sources re-emerge. The report also notes that lenders, banks, and special servicers will be more motivated to sell assets.
In the United States, demand from offshore buyers remains active. Middle Eastern capital will selectively pursue opportunities, primarily in East Coast markets, while investors based in China and Southeast Asia will scour the West Coast for purchases. European investors are expected to remain quiet in 2012. “While the volume of foreign capital invested in the United States will not move the needle on a national basis, foreign investors will define the market in several gateway cities,” Adler notes.
Latin American investment fundamentals will be strong in 2012 as the economic growth rate in the major South American countries is expected to be double that of the United States over the next several years. “Brazil continues to lead South America in terms of investment activity and large-scale development opportunities. Argentina, Colombia, Chile, and Peru are also increasingly on the radar for domestic and intra-regional investors,” says Gregory Rumpel, managing director of Jones Lang LaSalle Hotels. “We expect the hotel transaction market in South America to slowly open up over the medium term, and the number of internationally branded hotels across all segments is poised to increase over the next several years.”
