News
LODGING FUNDAMENTALS TURN CORNER
October 14, 2010
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| Hotel transaction volume YTD this year has increased 210% over the same period last year. That’s according to JLL Hotels managing director Arthur Adler, who moderated a standing-room panel featuring Host Hotels and Resorts’ James Risoleo, Interstate’s Edward Blum, RLJ Development’s Jeffrey Dauray, Morgan Stanley’s James Chung, and Metlife Real Estate Investment’s Steven Taylor. James Risoleo says going into 2010, Host expected its RevPAR to be down as much as 5% or flat but as of Q3 2010, it’s up 8%. Jeff says at this stage we’re seeing some correction of the overreaction cutting room rates. Steve says Metlife is underwriting to current cash flow but will look at peak-year performance. Edward says Interstate, as the largest third-party manager of hotels, has been taking on assignments from lenders and special servicers. Jeff says RLJ is IRR-driven and is looking for double-digit RevPAR growth in its investments. And James Chung of Morgan Stanley says that CMBS won’t solve the lack of capital in the marketplace, given that CMBS pools include only about 10% hotel. |
