Jones Lang LaSalle Hotels estimates that $48 billion worth of U.S. hotel sales could be completed by the end of 2007. This represents the fourth consecutive year of record volume, and a 37% lift on last year's record-breaking figure of $35 billion, proving that investors' appetite for the hotel sector remains at an unprecedented high level.
"U.S. hotel deal activity to June has already reached $32 billion, higher than we initially predicted. This represents more than half of the global volume of $56 billion for the same period," said Kristina Paider, senior vice president of research and marketing for Jones Lang LaSalle Hotels. "One half of the sales of this period were driven by REITs being taken private, and another third was private equity groups buying up real estate as well as management and brands, as seen with Blackstone's recent purchase of Hilton Hotels Corporation."
The 14th edition of Jones Lang LaSalle Hotels' Hotel Investor Sentiment Survey ("HISS") highlights investors' ongoing enthusiasm for the hotel sector. It shows that Americas' buyers outnumber sellers by 5:2. Investors indicated upscale hotels as their preferred asset type in 26 of the 29 surveyed markets. The survey also shows that 18.5% of respondents are now expecting to build hotel assets, indicating that investors are being pushed to consider development due to the shortage of available investment stock.
"With continued confidence in trading performance we are expecting balanced growth going forward. Our survey results demonstrate that yields are still tightening and investors' expectations for leveraged IRRs have tapered slightly as interest rates rise due to the recent credit crunch. While the credit markets are showing signs of weakness, the strength of the economy, resulting in increased business and leisure travel, combined with constrained supply will continue to create an attractive investment environment," said Arthur Adler, managing director and CEO-Americas for Jones Lang LaSalle Hotels.
About Jones Lang LaSalle Hotels Jones Lang LaSalle Hotels, the first and leading global hotel investment services firm, is uniquely positioned to provide both the depth and breadth of advice required by hotel investors and hotel companies, through a robust and integrated local network. In 2006, Jones Lang LaSalle Hotels provided sale and purchase advice on 186 hotel transactions globally; representing a combined value of US$9.3 billion, a total of 43,272 hotel rooms in 78 cities. In addition advisory and valuation services were provided on 589 assignments globally for 136,270 rooms across approximately 280 cities.
The global team comprises 210 hotel specialists, operating from 24 offices in 14 countries. The firm's advice is supported by a dedicated global research team, which produced over 45 publications in 2006 in addition to client research. Jones Lang LaSalle Hotels' services span the hospitality spectrum, from luxury single assets and large portfolios to select service and budget hotels, resorts and pubs. Their services include investment sales, mergers and acquisitions, capital raising, valuation and appraisal, asset management, strategic planning, operator selection, management contract negotiation, consulting, industry research and project development services. Jones Lang LaSalle Hotels' clients have access to the resources of its parent company, Jones Lang LaSalle (NYSE: JLL). www.joneslanglasallehotels.com