hotel real estate
Hospitality Financial Leadership: What Are CAP Rates and How to Use Them
David Lund | November 4, 2024
A capitalization rate, or cap rate, is a measure of the income return on an asset, such as hotel or rental property, relative to its purchase price. It is calculated by dividing the net operating income (NOI) of the asset by its purchase price. That’s what this piece is all about. It also must be said from the get-go that understanding cap rates is not so difficult. “Normally” NOI is calculated using all income less all operating expenses but does not include costs for debt, depreciation, amortization, reserve for capital expense or income taxes. That’s the typical basis for the calculation of the hotel’s value, est...
Hotel Assets: The Dark Horse in Real Estate Investing
Dancong 'Dannie' Li | October 21, 2024
By Dancong 'Dannie' Li , Jingjianxiong 'Charlie' Shi , Monique Rosszell Introduction Once considered the 'underdog' in the world of real estate investing, the hotel sector has experienced a remarkable resurgence over the past decade, with a particularly significant upturn since 2021, driven by the surge of pent-up demand resulting from the pandemic. Hotels were often perceived as risky investments due to their seasonality and reliance on short-term leases (i.e., daily rentals). In comparison, the multifamily and office sectors have often been considered safer real estate investments due to the stability of rental income, their resilien...
Q2 2024 Major U.S. Hotel Sales Survey
Daniel Lesser | July 22, 2024
By Daniel H. Lesser Despite the Federal Reserve’s aggressive monetary policy aimed at controlling persistent inflation, during the first half of 2024, the U.S. economy continued to demonstrate resilience. While strong growth in many subcategories of Gross Domestic Product (GDP) including consumer and government spending, investment, exports, and employment have many optimistic, the economic outlook is tempered by global geopolitical risks including on-going wars in Europe and the Middle East. Although the U.S. economic outlook remains positive, signs of a softening consumer are mounting within lower-to-middle-income households. While re...
A Closer Look at Hotel Interest Rates: Past and Future
Dan P. McCoy | May 30, 2024
By Daniel P. McCoy Over the past couple of months, it has become increasingly clear that interest rates for hotel financing, and just about everything else, may stay higher for longer. As markets adjust to this expectation, many investors are realizing that they may not be able to delay deals until rates drop back down to so-called “normal” levels. There is mounting pressure for financing decisions that will need to be made in the coming months. In this article, we have compiled and analyzed historical hotel interest rate data, as well as indications from the Federal Open Markets Committee (FOMC or “Fed”) on the anticipated direc...
Hospitality Financial Leadership: Putting a Dollar Value on a Hotel
DAVID LUND | May 20, 2024
By David Lund Determining the current selling or asking price for a hotel is a bit tricky. Compared to estimating the present value of a house it’s more like a detailed math exercise rather than a google search on Redfin. That’s what this piece is all about, how you can estimate the value, AKA sales price. Commercial real estate firms specializing in hotel valuations are what your bank is going to require that you use if you’re asking them for financing to buy a hotel. That makes sense because the bank will want to protect their interest. If you own a hotel and want to sell it you can go that route as well but it’s not like two ...
Avison Young – Ten Years of Performance
Avison Young | April 25, 2024
ATLANTA – April 25, 2024 – Avison Young Hospitality Group releases today its Ten Years of Performance presentation. Last 10 Years Sales Performance...
Avison Young Closed 12 Hotel Transactions Over Last 90 Days
Avison Young | March 11, 2024
ATLANTA – March 11, 2024 – Avison Young announces today that the firm has closed 12 hotel transactions over the last 90 days. Four of the sales were Hilton-branded hotels, two were Marriott-branded hotels, and an IHG and other brands made up the balance. Geographically the hotels were located in the following states – IN, KY, PA, CO, VA, AR, MA, GA, and TN. Of special note, Thierry Roch and Rick George closed a sale on a boutique hotel in the Cape Cod area for close to 1m per room and Chris Kilcullen closed the sale for the upscale Ascent on Main in Parker, CO. Chris Stark, Brad Sinclair, Mike George, Thierry Roch and Rick George were t...
Q2 2023 Major U.S. Hotel Sales Survey
Daniel Lesser | July 20, 2023
By Daniel Lesser Defying the expectations of many, the U.S. economy has demonstrated resilience driven in part by a solid employment report with stronger-than-expected wage growth during June, along with continued healthy levels of consumer spending. With this said, the U.S. economy has been slowed by the Federal Reserve’s aggressive drive to tame inflation through a series of interest rate hikes that began early last year. Although trending downward, with inflation remaining above its two percent target, the Federal Reserve is on track to raise interest rates again this month and mull another hike as soon as September. Despite elevate...
