Hotel transaction volume in the U.S. reached $5.1 billion through May 2012, representing the second highest volume over the past four years, according to data from Jones Lang LaSalle Hotels. The average single-asset transaction size reached $40 million during the first five months of 2012, representing the second highest start to a year since 2008, only exceeded by the first five months of 2011. The average price per key for single assets that traded year-to-date 2012 topped $194,000, 5 percent above the full-year 2011 level.
“The volume of capital flowing to hotel real estate remains high as acquisitive investors enthusiastically seek opportunities to buy hotels,” says Arthur Adler, Americas CEO of Jones Lang LaSalle Hotels. “Underpinning investor confidence is the continued strength in hotel operating fundamentals, which are solid across all metrics. On a national basis, hotel revenue per available room (RevPAR) has maintained the strong growth rate posted in 2011.”
He adds: “Private equity investors…account for 52 percent of transaction volume, followed by real estate investment trusts (REITs) as the second most acquisitive group, representing 25 percent of purchases by volume. REITs remain active bidders for a number of hotel transactions and are expected to be increasingly active in the market in 2012.”
Single-asset hotel transactions accounted for 70 percent of deal volume. High-quality assets with in-place cash flow located in key urban markets have made up the bulk of the hotel trades tracked thus far in 2012.
