Private Equity to Boost Hotel Investments in Smaller U.S. Cities

Private-equity firms will help drive an increase in hotel transactions this year in smaller U.S. cities, where investment returns tend to be higher than in large markets, according to Jones Lang LaSalle Hotels.

“While public real estate investment trusts have been focused on major markets, private equity has been looking at secondary markets,” where hotel income is greater relative to property prices, said Arthur Adler, managing director and chief executive officer for the Americas at the firm, part of Jones Lang LaSalle Inc. “The reluctance to invest in secondary markets is melting.”