Magazine article Mortgage Banking

U.S. Hotel Deals Fall 81 Percent during First Half of 2008

Magazine article Mortgage Banking

U.S. Hotel Deals Fall 81 Percent during First Half of 2008

Article excerpt

Chicago-based Jones Lang LaSalle Hotels announced that the volume of U.S. hotel transactions for the first six months of 2008 declined 81 percent from the same period in 2007, reaching $6 billion.

According to Jones Lang LaSalle Hotels' proprietary database, which tracks transactions $10 million and above, first-quarter 2008 transaction volume was relatively stronger at $3.4 billion, whereas the second quarter saw $2.6 billion in deal closings.

Illiquid debt markets and economic uncertainty have U.S. investors generally taking a "wait-and-see" approach, explained Arthur Adler, managing director and chief executive officer--Americas for Jones Lang LaSalle Hotels.

"While the drop in U.S. transaction volume is pronounced, it is not far below the volume recorded in the first half of 2004 and 2005," said Adler. "The full-year 2008 U.S. volume is expected to come in somewhat below the 2004 total, in the range of $10 [billion] to $12 billion."

Real estate investment trusts (REITs) gained the most ground on the acquisition front in the first half of 2008 and were the largest net buyer of hotel assets, reflecting a shift from debt-driven transactions to more traditional real estate investment deals, according to Kristina Paider, senior vice president of marketing and research for Jones Lang LaSalle Hotels.

"Highly leveraged investors such as private-equity firms bought assets worth $998 million in the first half while disposing of $1.27 billion in assets, making them net sellers," said Paider. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.