Hotel Acquisitions Will Rise 28% to $34.8 Billion in 2011, Jones Lang Says

Purchases of hotels probably will rise 28 percent to $34.8 billion worldwide this year as climbing occupancies lure investors to the properties, Jones Lang LaSalle Hotels said today.

Lodging transactions increased to $14.8 billion in the first half of 2011, up 117 percent from a year earlier, the London-based company said in a statement. In the Americas, acquisitions totaled $7.4 billion, up 187 percent, driven by deals in such large cities as New York.

Real estate investment trusts “continued as the most acquisitive buyers in the Americas although private equity investors, who were on the sidelines during the downturn, made a strong comeback to the market in the first half of 2011,” Arthur Adler, chief executive officer for the Americas at Jones Lang, said in the statement.

Pebblebrook Hotel Trust (PEB), the owner of the W Hotel in Boston and the Mondrian Los Angeles, agreed in June to buy a stake in six boutique hotels in New York for $152 million. DiamondRock Hospitality Co. (DRH), a REIT with hotels operated by Marriott International Inc., in May agreed to buy Manhattan’s 712-room Radisson Lexington Hotel New York for $335 million.

Hotel occupancies in the top 25 U.S. markets climbed to 65 percent this year through May from 62 percent a year earlier, according to Smith Travel Research Inc. of Hendersonville, Tennessee.

Sales of lodging properties in the Americas probably will total $16 billion in 2011, up from Jones Lang’s previous forecast of $13.1 billion, the company said. Its forecasts are for property transactions and exclude recapitalizations, debt purchases and foreclosures.

The company’s parent is Chicago-based Jones Lang LaSalle Inc. (JLL), the largest publicly traded commercial property brokerage after Los Angeles-based CB Richard Ellis Group Inc.

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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