In 2013, the United States saw $16.9 billion in hotel transactions, according to the Hotel Transaction Almanac, a report from STR Analytics. This represents an increase of nearly $4 billion in asset trades compared to the $13 billion that occurred in 2012.
“After a relatively slow year in 2012, it’s promising to see hotel investment activity regain momentum in 2013,” says Steve Hennis, director of STR Analytics. “We anticipate deal volume to rise again in 2014 with demand compression and only modest levels of new hotel supply fueling the appetite of the hotel real estate sector.”
Other key findings from the 2014 Hotel Transaction Almanac show that pricing remains strong, with the average price per key in 2013 at $192,000. The volume of distressed asset sales continues to decline with only 7 percent of transactions involving distressed assets, and the average interest rate for financing acquisitions was 4.6 percent, the lowest point on record.
Additional capital injected into properties post-acquisition averaged $27,000 per room, while the average cap rate declined to 8.8 percent in 2013 from 9.4 percent in 2012.
