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A MIDYEAR MARKET UPDATE FROM BERKADIA HOTELS AND HOSPITALITY
At the start of the 2021 , Berkadia Hotels and Hospitality was bullish about a hospitality rebound in the second half of the year and with more Americans traveling for leisure expected through the end of the year and a strong development pipeline , the future continues to look bright .
Today ’ s Landscape
We ’ ve been surprised by the dramatic positive outlook we ’ ve seen from both hotel owners and investors upon vaccine distribution . Of course , there ’ s still a ways to go in the recovery in our market , but the bounce back in leisure travel has been relatively swift and even business travel is starting to pick up again . As a result , sales and financing have picked up exponentially since this time last year and it ’ s getting busier by the day . Over the last two years our team has closed more than $ 2 billion in combined sales and financing totaling over 10,500 rooms across 48 markets .
Of course , activity nearly ground to a halt in March of last year and the market was just starting to thaw a bit in the second quarter of 2020 , so perhaps a better indicator of the strength and appetite we ’ re seeing is that desirable assets ( think : more Sunbelt , coastal , leisure destinations , extended stay , limited and select service brands ) are being acquired based on projections rather than historical NOIs .
Andy Coleman Senior Managing Director , Head of Berkadia Hotels and Hospitality
What ’ s Ahead
to act as a trusted advisor to our clients to ensure they ’ re making the best long-term decisions in what we view as a choppy market . Fast , collaborative and agile , we ’ re built to help clients navigate this type of market . Our team members average 25 years of industry experience , which , coupled with our expansive mortgage banking platform , fullsuite investment sales advisory , and flexible loan servicing team , make us a true one-stop shop for hotels investors and lenders .
There ’ s definitely a sense that this is a seller ’ s market , so we expect to see more hotels come online through the end of the year . Private equity interest will be a driver of this activity as these firms get aggressive on acquisitions . We ’ re seeing the most interest in properties in drive to leisure markets and core select service hotels . Like the multifamily market , Florida and the Sunbelt are hot and , of course , coastal areas remain attractive .
We ’ re focused on building the best team in the business . Last year , even in the midst of the pandemic , we added some incredible talent to our team : industry veteran Denny Meikleham joined our Boston office and Scott Hall and Aaron Lapping are now anchoring our team on the West Coast . We remain dedicated to bringing on board new talent and continuing to develop our current team .
We ’ re excited about this confidence but remaining vigilant on behalf of our clients . We ’ ve seen some really aggressive pricing from buyers predicated on a very quick market recovery . There are fewer distressed assets on the market than many in the industry had predicted , so competition is high . We continue
As we continue to see a steady increase in occupancies with leisure , transient business and then group business hitting the road , we ’ re excited to be , and stay , busy ! It feels great to be working with clients and closing deals and we ’ re going to be keeping that momentum rolling into 2022 and beyond .
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