Magazine article Mortgage Banking
U.S. Hotel Buyers Outnumber Sellers
The strong appetite for hotel ownership persists, as aspiring buyers outnumber potential sellers by a margin of 5 to 2, according to a report by New York-based Jones Lang LaSaIIe hotels.
The Jones Lang LaSaIIe hotels' hotel Investor Sentiment Survey, released in September, noted that almost half, or 45.9 percent, of investors intend to buy, exemplifying the overriding buy intention on 21 of the 26 markets surveyed.
Although the "buy" sentiment still dominates the hotel investment market in North and South America, it has softened since the last survey by 16.5 percentage points, reflective of both the increased asset values and the lack of quality assets available, according to Arthur Adler, managing director and chief executive officer-Americas for Jones Lang LaSaIIe hotels.
"Across the Americas, the low-yield environment over the last two years has been sustained, with cap rates softening by a mere 10 basis points over the course of the last six months to 8.5 percent," said Adler. "Similarly, internal rate of return [IRR] increased by 50 basis points, with 19 percent representing the average trigger motivating investors' new acquisitions."
The "sell" ranking is at its highest level since the inception of this survey in July 2000, reaching 18.9 percent as investors attempt to take advantage of the capital appreciation over the last several years and the continuing favorable pricing environment, said Kristina Paider, senior vice president of research and marketing for Jones Lang LaSaIIe hotels.
"This increase has helped to fulfill the overwhelming number of interested buyers, triggering a more active transaction market," said Paider.
Consequently, during the first six months of 2006, U. …