Hotel Acquisitions in Americas to Increase 25% in 2011, Jones Lang Says
Hotel sales and acquisitions in the Americas will jump as much as 25 percent this year, buoyed by real estate investment trusts and foreign investors seeking to deploy cash, according to Jones Lang LaSalle Hotels.
Transactions may total $13 billion this year, the London- based company said in a statement today. Volume was about $10.5 billion in 2010, almost five times the previous year’s levels, according to Jones Lang.
“Due to additional capital raises, REITs are expected to continue to be dominant buyers in 2011, and private equity groups and institutional investors will increasingly join the mix as leverage levels and terms improve,” Arthur Adler, managing director and Americas chief executive officer at Jones Lang LaSalle Hotels, said in the statement. The U.S. will be one of the most active markets for deals globally, the company said.
A rebound in U.S. business and leisure travel are attracting hotel investors. Revenue per available room, or revpar, in the top 25 U.S. markets rose to $76.61 during the first 11 months of 2010 from $71.55 a year earlier, according to Smith Travel Research Inc. of Hendersonville, Tennessee.
REITs may be the primary buyers of hotels as they come on the market because they are “well-capitalized” and have access to financing, John Arabia, managing director at Newport Beach, California-based real estate research company Green Street Advisors, said in September.
Sunstone, LaSalle Deals
Sunstone Hotel Investors Inc., based in Aliso Viejo, California, in August acquired Miami Beach’s Royal Palm hotel in a foreclosure auction for about $117 million. LaSalle Hotel Properties, a Bethesda, Maryland-based REIT focused on upscale lodging, in September said it bought a hotel in San Francisco as well as two in Philadelphia for a total of $292.5 million.
Investors from the Middle East will help increase transactions on the U.S. East Coast this year, Jones Lang said. Asian buyers, who accounted for about 8 percent of U.S. purchases in 2010, will continue to boost demand and target primarily the western U.S., the company said.
The firm’s forecasts refer to asset transactions and don’t count note and loan sales, restructurings that require new equity and deed-in-lieu transfers. The company’s parent is Chicago-based Jones Lang LaSalle Inc., the second-largest publicly traded commercial property broker.
To contact the reporter on this story: Nadja Brandt in Los Angeles at nbrandt@bloomberg.net
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net.
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