Jones Lang LaSalle Hotels has released updated metrics on the U.S. hotel market, reporting that volume reached $4.9 billion through May-triple the volume recorded during the first five months of 2010.
“We are seeing a striking turnaround in the market for hotel transactions,” says Arthur Adler, managing director and CEO-Americas for JLLH. “Building on improving lodging fundamentals which gained strength last year, the volume of capital flowing to hotel real estate has ignited as acquisitive investors re-entered the market in full force, leading to a 170 percent increase in transaction levels.”
Single-asset hotel transactions dominated the landscape, accounting for 85 percent of deal volume. High-quality assets with in-place cash flow located in key urban markets have comprised the bulk of the hotel trades tracked thus far in 2011. Meanwhile, real estate investment trusts (REITs) accounted for 61 percent of single-asset transaction volume, followed by private equity investors, the second most acquisitive group, representing 25 percent of purchases by volume.
“Values are improving across all metrics,” says Robert Webster, a managing director for JLLH. “The average single-asset transaction size jumped to $84 million during the first five months of 2011, doubling on the prior-year period. The average price per key of single assets that transacted during the period increased 27 percent to top $234,000.”
