PHILADELPHIA—No matter what side of the hotel industry you are on—buying a hotel, selling a hotel, owning one, or operating one—it's a good time to be involved.
At the "Buying and Selling in Today's Marketplace" panel at the Asian American Hotel Owners Association conference, three brokers discussed hotel transactions amid today's climate.
There's little debate that owning a hotel today should bring you healthy returns. "There's not a better time to be involved in hospitality from an ownership perspective," said Anthony Falor, managing director hospitality, Rockwood Real Estate Advisors, noting there is still room for demand growth.
Of course, you can't compare markets apples to apples. There are distinctions, said Greg LaBerge, national director, Marcus & Millichap. "You must put the market you are in in perspective," he said. "Pay attention. The national numbers you see aren't the same in each market. You can't compare Texas to Iowa."
Brian Silberman, VP, CBRE, forecasted that this upswing in the cycle should last for at least a few more years. "It's a very interesting cycle we are in," he said. "It is a good time to be a buyer or a seller. We are coming out of a difficult time and owners expect another four years of growth before the next down cycle."
He said CBRE did more than 200 deals and $3 bilion in transactions last year.
BUY, SELL, BUILD
In light of where the industry is in the cycle, the three panelists discussed opportunities in buying, selling and building hotels. "There's less risk to buy than build from a bank standpoint," said Silberman. However, he said it is still very difficult to secure financing.
And in regards to selling, "We are fortunate with interest rates, which makes it easier to sell," said Falor.
In regard to the types of properties involved in transactions, LaBerge said you are seeing properties in a PIP life cycle—and needing immediate improvements—and properties that are setup, ready to go. "This will affect the property values tremendously," he said. "As a seller, be committed to PIP initiatives right in the beginning; it will help in the process."