INVESTMENT
BEST OUTLOOK
AND YIELDS FOUND IN RESORTS
THERE IS NOTHING THAT THE CAPITAL MARKETS LIKE BETTER THAN A POSITIVE OUTLOOK . ADD INSATIABLE CAPITAL SUPPLIES AND INTEREST IN THE RESORT SEGMENT IS SKY HIGH .
Contributed by KEVIN MALLORY , , GLOBAL HEAD , CBRE HOTELS
The resort segment of our sector is on fire . Demand from consumers and investors is outstripping supply . The confluence of strong operating fundamentals coupled with highly liquid capital markets is driving record pricing . Incredible transactions are seemingly announced at a pace not seen in my now 40-plus years in the business . Let ’ s explore .
THE PANDEMIC We have never experienced a global market shock to the sector that compares to the COVID-19 pandemic . It ’ s worth remembering one fundamental concept ; the shock was demand-driven as opposed to being economic in nature . The world ’ s capital infrastructure , while experiencing volatility , maintained its integrity and its thirst for opportunity .
Early , we experienced capital formation around distress . Every day it seemed we were approached by new capital seeking opportunities . Capital was not the issue ; we lacked investment supply . No owner wants to sell their investment at distress pricing . Enter government subsidies that played a major role in allowing