Hotel REITs Hungry for More
Wall Street Journal reports: Publically-listed REITs gorged themselves on hotel properties in 2010, with companies such as Host Hotels & Resorts, Pebblebrook Hotel Trust, and Sunstone Hotel Investors all scooping up high-quality trophies and distressed bargains over the course of the year. These firms’ ability to raise capital from secured and unsecured debt markets is allowing them to expand their search in 2011, according to the Wall Street Journal, to include luxury hotels. The Journal sites data aggregated by Real Capital Analytics (RCA) in stating that, “This year, public hotel REITs have accounted for 47% of U.S. hotel acquisitions by dollar volume, up from 20% last year.” Market players of all capital group types are anticipating a steady rise in hotel occupancy, and thus revenue, in the coming quarters, yet REITs remain the best positioned among all buyers to seize opportunities and make the highest bids.
Indicating the growing share of top-shelf properties in the pool of hotel acquisitions, the Journal stated that according to RCA’s data, the average price-per-room for hotel properties rose from $97,610 in 2009 to $158,570 in 2011 year-to-date. That is even above the previous per-room high of $153,463, set in 2006 as the market neared its apex. The Journal attributes this year’s spike to the large number of trophy hotel properties that have traded. These include acquisitions such as LaSalle Hotel Properties' $80 million purchase of the Viceroy Santa Monica, a posh seaside hotel outside of Los Angeles.
View the full article on Wall Street Journal: Hotel REITs Hungry for More
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Posted by: Nina Turner