RCA in the commercial property press:

Tide Starts to Turn with Uptick in Hotel Deals

The Wall Street Journal reports: Hotel-industry veteran Jon Bortz of Pebblebrook Hotel Trust raised $405 million in December to buy hotels at distressed prices. Pebblebrook committed to spending most of those funds last month, promising $372 million to buy five high-end hotels, including the Sir Francis Drake in San Francisco and the Doubletree Bethesda Hotel in Maryland.

Their acquisitions help show that hotel sales are beginning to revive after a dismal two years. According to Real Capital Analytics, the first four months of 2010 saw no less than 78 hotels traded hands for a total of $2.2 billion, compared with 52 deals for $888 million during the same period last year.

Part of this is due to the fact that distressed hotel properties are working their way through the process of workout and foreclosure. Real Capital says that to date, 42% of this year’s hotel deals involved properties with distressed debt (they were delinquent, foreclosed or otherwise under pressure from their lender). That compares with 11% last year and 1% in 2008.

Articles related to this topic:

 PE Firm Starwood Raises $2.8 Bil. for Distressed Real Estate
 Wells Fargo and LNR Selling Distressed Assets
 European Hotels Maintain Their Value with Slow Development

Posted by: Matthew Stone

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