SPECIAL REPORT
POST-ALIS , AS WE PROGRESS THROUGH 2022 , WE EXPECT MANY MORE PROPERTIES TO COME TO MARKET , FOR A VARIETY OF REASONS , WITH MORE REALISTIC EXPECTATIONS . THIS SHOULD NARROW THE BID-ASK SPREAD AND GET TRANSACTIONS FLOWING .
– EVAN HURD
investor interest strong . Additionally , all the recent economic growth in these two cities has investors bullish on the overall demand increasing moving forward , despite all the new room supply being added .
Kevin Mallory , CBRE Hotels : We expect a healthy deal environment throughout 2022 , driven by recovering fundamentals and high liquidity in both the equity and debt markets . M & A activity will be driven in large part by companies seeking to scale and grow and / or take advantage of strong valuations .
Dan Hawkins , Berkadia : We expect that the number of deals hitting the market will cool . However , at strong REIT pricing , plus plenty of dry PE powder .
We expect mostly single assets and smaller to mid-size portfolio deals , as it is easier to get those deals financed , closed easily and economies of scale can be attained in asset roll ups with larger owners . We also expect some brand plays with bigger brand families to aggregate single branded concepts .
Andrew Cohan , Horwath HTL : Appetite is strong in the Caribbean , as construction lending is still very slow , development timelines do not generate positive cash flow for several reporting periods , and oneby-one conversion of hotels and resorts can consume an operator or brand ’ s development team efforts with little impact … In 2022 , I would want to be an all-inclusive owner / operator with five to 20 properties distributed in the Caribbean and
Mexico , or across the Mediterranean .
Eric Guerrero , HVS : Based on our own pipeline and what I ’ m seeing in the broader market , I think dealmaking is only going to continue to get better . I know this is optimistic , but I believe the transaction volume will reach pre-COVID levels by the end of 2022 . The reason for this is all the equity chasing deals , financing loosing up , and hotel performance recovering so an investor can underwrite a credible return on day one . Most believe that the transaction market won ’ t fully recover to pre-COVID levels until 2023 …
Within Texas , the appetite is strong , especially for markets like Austin and Dallas . Texas remained relatively open throughout COVID , so our hotels here did not see as large of an impact as hotels in other major cities , which helped keep
APPETITE IS STRONG IN THE CARIBBEAN , AS CONSTRUCTION LENDING IS STILL VERY SLOW , DEVELOPMENT TIMELINES DO NOT GENERATE POSITIVE CASH FLOW FOR SEVERAL REPORTING PERIODS , AND ONE-BY- ONE CONVERSION OF HOTELS AND RESORTS CAN CONSUME AN OPERATOR OR BRAND ’ S DEVELOPMENT TEAM EFFORTS WITH LITTLE IMPACT .
– ANDREW COHAN
58 hotelsmag . com January / February 2022