(Denver, Colorado; Orlando, Florida) – HREC Investment Advisors has released its comprehensive study of hotel transactions in the Greater Orlando area for 2014. The study covers over 500 hotels located in Orange, Osceola, Seminole, Polk and Lake Counties.
The HREC study revealed that a total of 45 changed ownership in 2014, the same number as in 2013.
Regarding the single-asset sales:
· Aggregate sales volume in 2014 was $464 million vs. $890 million in 2013
· Average transaction size in 2014 was $11.9 million vs. $6.9 million in 2013 (after subtracting for the Peabody sale)
· Median transaction size in 2014 was $3.9 million vs. $4.7 million in 2013 (after subtracting for the Peabody sale)
· The average price per guestroom in 2014 was $64,500 vs. $35,300 in 2013 (after subtracting for the Peabody sale)
The top three transactions by sale price were: the Hyatt Grand Cypress at $190 million ($253,300/key), the Nickelodeon Family Suites at $78.8 million ($101,800/key) and the Holiday Inn Resort Lake Buena Vista at $44.0 million ($86,800/key).
By sub-market, Kissimmee East was the most active in terms of transactions (15); however, Lake Buena Vista was the most active in terms of dollar volume at $312.8 million.
In 2014, only two hotels – totaling $21.6 million – sold as part of a “Corporate/Portfolio” transaction, down from 16 hotels totaling $185 million in volume in 2013. Further, 12 area hotels were affected by the Initial Public Offerings of La Quinta Holdings, Inc.
Said Paul Sexton, head of HREC’s Orlando office, “With the passing of 2014, we find ourselves firmly in the middle of the real estate cycle: it’s a good time to be a buyer, a good time to be a seller and a good time to be a holder of hotel assets. At both the higher and lower ends of the market, we are seeing terrific transaction activity – as exemplified (respectively) by the sale of the Hyatt Grand Cypress and the 17 sales along the 192 corridor.”
Added Scott Stephens, HREC’s COO and Southeast practice leader, “Over the years, Orlando-area hotels have been a consistent part of nationally significant portfolio sales. Although the number of hotels involved in these types of transactions was down in 2014, based on our first-hand knowledge of a number of select-service portfolios that are “in play,” we expect greater velocity in 2015 in this segment of the transaction market.”
Continued Sexton, “Additions to supply continued to be muted, despite a couple of high-profile projects that came to market in 2014 – namely Lowe’s 1,800-guestroom Cabana Bay Beach Resort at Universal and the 444-guestroom Four Seasons Orlando at Walt Disney World. More specifically, hotel room supply grew by roughly 1.5% in 2013 and by approximately 2.0% in 2014 and it is projected to grown by less than 1.5% in 2015.”
For a copy of HREC’s full report on the Greater Orlando hotel transaction market, please contact:
Paul Sexton, Vice President – 407.963.4840 or psexton@hrec.com
Scott Stephens, COO & Senior Principal – 813.635.0600 or sstephens@hrec.com
Ashley Hunt, Director of Marketing – 303.267.0057 or ahunt@hrec.com
Visit HREC’s website at www.hrec.com
