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Thursday, 07 February 2019

Hotel Investment-Sales Volume Jumped 30 Percent Last Year to $36.5Bln

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Hotel investment-sales volume in the United States this year is expected to roughly match last year's $36.5 billion, according to an estimate by JLL Hotels & Hospitality.

Last year's volume, meanwhile, represented a 30 percent increase from 2017's $28 billion of activity and was fueled by a 76 percent increase in the sale of luxury hotels and 40 percent increase in the sale of resorts in the U.S. Looking ahead, JLL expects volume this year to be driven by resorts, portfolios of upper-tier select-service hotels and hotel entities. Hotel REITs are expected to become more active in acquisitions, while private-equity groups, the largest buyers of hotels, will continue to dominate.

Investments in the sector will benefit from the large amounts of capital that have been raised by real estate funds that have a hotel focus or include hotels among the property types they pursue. Last year, for instance, fund operators raised $118 billion of equity commitments and now have $295 million of dry powder, or capital ready to be invested. At least some of that is earmarked or might find its way to the hotel sector.

"Hotel investment and strategy will be heavily linked to opportunity - what is available in the market?" said Gilda Perez-Alvarado, chief executive of JLL Hotels & Hospitality, Americas. She added that certain irreplaceable properties with big tickets provide cash-rich investors with ways to "efficiently deploy large amounts of capital."

Over the past five years, roughly 70 percent of investments in the sector are completed through multi-asset deals.

Meanwhile, global hotel investment-sales activity reached $67.7 billion last year and is expected to slow slightly, to $67.2 billion this year, mostly because of an expected 5 percent to 10 percent drop in sales of hotels in Europe, the Middle East and Africa, to $21.2 billion.

In the Asia-Pacific region, investment-sales volume is expected to climb by 15 percent to $9.5 billion. Japan is expected to be the busiest market as investors try to take advantage of the expected spike in hotel-room demand stemming from the Rugby World Cup next year and the Summer Olympics in Tokyo the following year.

Comments? E-mail Jim Boyle, or call him at (267) 247-0114.



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Additional Info

  • Syndicate to Realpoint: No
  • Sector: Hotel & Resort
  • Subject: Research (RES)
  • Company: Jones Lang LaSalle Inc.
  • Private: No
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Data Digest

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

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CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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