The Radisson Blu Edwardian Bond Street in London . In January , Edwardian Group sold 10 Radisson Blu properties to Starwood Capital Group for an undisclosed price . |
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middle is going to be squeezed . Investors are being lured to three camps — luxury , limitedservice or lifestyle ,” said Nelson .
He added with the sharp rise in interest rates and with pension funds facing redemption pressures or maturity in defined benefit schemes , there are likely to be more buying opportunities in the leased market . These could present “ some interesting buying opportunities ,” he said . “ Debt pressures also are still going to persist with some investors facing refinancing risk , which will result in additional
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transactions over the next year as well .”
From Camble ’ s perspective , the buyer profile in 2023 “ was less about private equity and REITs and much more about sovereign wealth and some active high net worths . Already this year , [ we ’ ve seen ] private equity returning in a big way , so 2024 could look very different to last year .”
Nelson is enthusiastic it will be different . “ Just based on the investment deals that have been announced and going to be announced in the coming months , 2024 is going
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to be dramatically better than this time last year . Given the robust occupational trading environment , pricing for hotels subject to management agreements have been generally insulated by the rise in cap rates ; however , assets subject to leases have been impacted ,” he said .
Despite a more positive outlook , Camble acknowledged headwinds remain and impact deal flows , “ especially where higher interest rates and cap rates are not being reflected in any price corrections by sellers and their funders .”
According to CBRE , better
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operating fundamentals could likely improve some hotel owners ’ confidence , “ making them reluctant to lower asking prices … at the same time , investors are expected to maintain a more patient yet active stance , guided by the expectation that easing inflation will eventually lead to lower financing costs .”
And optimism and confidence may continue to spread across the industry ’ s denizens as 2024 heads into the second half , as well .
“ With the anticipated improvement in the interest
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May / June 2024 hotelsmag . com 75 |