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The Market Overview panel at the Hunter Hotel Investment Conference , from left : Dan Peek , president & COO , Hodges Ward Elliott ; Teague Hunter , president & CEO , Hunter Hotel Advisors ; Bill Grice , president of the Americas for CBRE Hotels ; Kevin Davis , Americas CEO , JLL Hotels & Hospitality Group ; and Evan Weiss , COO & principal , LW Hospitality Advisors .
EXPECTATIONS HIGH FOR HOTEL DEAL FLOW PICKING UP IN LATTER HALF OF YEAR .
By DAVID EISEN
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ATLANTA — You might have missed it , but according to Kevin Davis , Americas CEO of JLL Hotels & Hospitality Group , the next lodging cycle is already underway and it ’ s anticipated to be heady on the transactions front . “ On the surface , it doesn ’ t appear like a lot is going on , but there are lots of deals behind the scenes that will be announced ,” he said on a panel at the 35th edition of the Hunter Hotel Investment Conference at the Marriott Marquis . “ Sizable transactions will get done in the third and fourth quarter .” As one of the largest global brokers of real estate , JLL peer CBRE would know . According to Bill Grice , president of the Americas for CBRE Hotels , the brokerage house is already up 30 % on transactions year-overyear and it stands to get better , he said . “ There is a velocity of deals coming later this year as bid / ask spreads compress . We are in an asset class that has been an outperformer .”
Davis added that there is also a boom coming in foreign direct investment into U . S . hotels from Europe and the Middle
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SIZABLE TRANSACTIONS WILL GET DONE IN THE THIRD AND FOURTH QUARTER
– KEVIN DAVIS , AMERICAS CEO ,
JLL HOTELS & HOSPITALITY
GROUP
East , which view the U . S . as a safe haven for capital , what he referred to as a “ flight to quality .”
Consider New York , according to CoStar data , hotel trades reached $ 3.3 billion in 2023 , an increase of more than 37 % over the previous year . As Evan Weiss , COO and principal at LW Hospitality Advisors , pointed out : “ Thank god we are not in the office space .”
Optimism for an improved transactions market is a factor of many variables currently at play ; namely , the state of capital markets and the “ will they or won ’ t they ” cut interest rates . Don ’ t bet on it , according to Teague Hunter , president and CEO of Hunter Hotel Advisors . “ Seven percent ,” that is the new norm , he said . “ We are not going
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back to 4 % money — it ’ s not happening .”
With loan maturities coming due and a rougher refinance environment , many owners of hotels are having to ask themselves if now is the time to walk away from the table . According to Trepp , across all lender types , $ 2.81 trillion in loans will come due between 2024 and 2028 . In 2023 , $ 541 billion in debt backed by office buildings , hotels , apartments and other types of commercial real estate came due , the highest amount ever for a single year , according to Trepp .
“ Deals aren ’ t easy , but there is a lot of activity ,” Hunter said . “ There are lots of sellers .”
Another broker , Dan Peek , president and COO of Hodges Ward Elliott , said deal
THERE IS A VELOCITY OF DEALS COMING LATER THIS YEAR AS BID / ASK SPREADS COMPRESS
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– BILL GRICE , PRESIDENT OF THE |
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AMERICAS , CBRE HOTELS |
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May / June 2024 hotelsmag . com 21 |