Hotel & Motel Management - February 4, 2008 - (Page 42)

42 On the Block 2008 OUTLOOK H&MM February 4, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Brokers will remain unscathed in 2008 IN THE details High hopes for 2008 Although new supply and a new president could shake up the industry in 2009, this year should bring sales similar in number to 2007, aided by the input from: Big sales in some segments High demand for luxury Increase in foreign investors done deals The Mumford Co. represented Accor North America in the sale of a Motel 6 property in Amarillo, Texas, to Paramount Hospitality LP. Paramount intends to relicense the hotel under a new franchise brand. OKCAL Hospitality LLC purchased a Quality Inn in Oklahoma City from Oklahoma City Motor Inn LLC for $5.22 million. HotelBrokerOne brokered the transaction. Kalyan Hospitality LLC acquired an Elk City, Okla., Motel 6 for $1.85 million from First American Exchange Co. LLC. HotelBrokerOne brokered the transaction. By Emily Hanna ASSOCIATE EDITOR Luxury and resort properties, like [above] Chatham Bars Inn in Cape Cod, Mass., that CBRE Hotels sold in 2006, have high demand because travelers are willing to spend more on accommodations, said Eric Belfrage, v.p. CBRE. hile others worry about At the “bread-and-butter” levthe failing housing el, the economy and midscaleindustry, the cred- without-food-and-beverage segit crunch and rising prices at the ments, there will be high amounts pump, it’s business as usual for ho- of transaction activity this year, tel brokers in 2008. Insiders pre- said Eric Belfrage, v.p. CB Richdict hotel sales will be on par with ard Ellis Hotels. 2007, but there could be an end Mumford agreed that these in sight to the industry’s peak. segments will lead the pack this “The economy still is solid year in terms of quantity of transand interest rates are still very low. actions for two reasons: More of Those fundamentals, as far as our those hotels exist in the market, crystal ball can tell, will remain and the hotels trade at lower prices that way in ’08,” said so more people are willDavid Mumford, senior ing to purchase them. principal of The MumBut the best pricing and ford Co. “Beyond ’08, greatest demand will the glass starts to get a litfall to the upper-upscale tle cloudier.” and luxury properties, he H. Brandt Niehaus, said, citing higher barripresident of Huff, Nieers to entry and longer haus & Associates, said development periods. the number of hotel Mumford “I think luxury, uptransactions in 2008 like- THE MUMFORD CO. scale and resorts have ly will be equal to 2007, been the darling because due in part to remnants from last of the rate growth we experienced year’s large-portfolio sales. and the resurgence of demand,” “There’s going to be some spin- Belfrage said. offs where people who have bought But as revenue per available a group of properties are going to room begins to moderate, Belfrage sell off some of the [lower tier] of predicts the shine of these segtheir asset list,” Niehaus said. ments will wear off, although they W still will remain strong. While urban markets generally command high demand, they could have even more pull this year because of overseas investors. With the weak dollar, foreign investors are looking to spend in Belfrage the U.S., and their com- CBRE fort levels don’t tend to stretch far beyond major metropolitan markets, Belfrage said. “To get that buyer to Youngstown, Ohio, or somewhere like that is difﬁcult,” Belfrage said. “Uncertainty breeds risk, and risk is the enemy of investment capital.” At this point in the hotel cycle, there has been little new supply because of high construction costs. “We’re at this peak where values have sustained and the peak has sustained for one reason, and that’s the lack of new supply,” Belfrage said. Construction costs have been going up at least 12 percent to 15 percent every year, and because RevPAR has never matched that increase, new development could not be justiﬁed, Belfrage said. Mumford said that currently, projects are getting approved and ﬁlling the pipeline, but the effects of this won’t be felt this year. Belfrage expects that once this bulge of supply enters the market in 12 months to 18 months, the industry will experience a soft landing that will bring RevPAR down slightly but not enough to put it in the negative. Another potential threat for 2009 to the investment community is the upcoming presidential election. Investors currently are concerned with whether individual and corporate taxes and capital gains will increase when the incoming commander in chief takes the reins in 2009, Mumford said. “I think we’ve got another solid year ahead of us,” Mumford said. “But the new supply in ’09 and certainly the concerns about what happens politically beyond the election are going to have a big impact on hospitality.” ehanna@questex.com CBRE HOTELS The 135-room Hawthorn Suites in Schaumburg, Ill., was sold by Oxford HPC Schaumburg Property Co. LLC to American Lane Schaumburg Hotel LLC. Paramount Lodging Advisors facilitated the sale. Tempe Hospitality Suites LLC sold a 162-room Hampton Inn & Suites in Tempe, Ariz., to VRE Holdings II LLC, a private real-estate investment trust. Paramount Lodging Advisors brokered the sale. HEI Hotels & Resorts acquired the 234-suite Embassy Suites Tysons Corner in Vienna, Va., for an undisclosed amount from investors advised by Prudential Real Estate Investors. Jones Lang LaSalle Hotels brokered the transaction. Albuquerque, N.M. ALBHI L.P. sold the Hampton Inn-University/Midtown of Albuquerque, N.M., to Terrapin Investors LLC for an undisclosed amount. Terrapin Investors, a Californiabased investor, intends to renovate the facility to maintain Hampton Inn’s standards and to reinforce a competitive position in the market. The Mumford Co. served as exclusive adviser to ALBHI. THE MUMFORD CO. Two Super 8 Motels in Cedar Rapids, Iowa, were sold to Bhanu and Sannadh of Waterloo, Iowa. Paramount Lodging Advisors represented the seller, Iowa Investment Partners, in the transaction. Compiled by Emily Hanna, ehanna@questex.com http://www.HotelMotel.com http://www.HotelMotel.com/digital_edition

Table of Contents Feed for the Digital Edition of Hotel & Motel Management - February 4, 2008

Hotel & Motel Management - February 4, 2008 Contents Murray, Keltner to Keynote Atlanta Event ABVI Approves Per-room Fee Hike Growth, Guest Loyalty on Lexington’s Plate Perspective Legally Speaking AAHOA Update Marketing Matters Consultant’s Corner On Finance Training Trends HotelWorld Update Trends & Stats Outdoor Furniture Limited-service-hotel-chain Report Energy-management System Provides Link to Savings Upgraded Bedding Program Cost Comes Due Less Hot Water Equals Less-costly Bills Events Learn to Take Advantage of Lower Insurance Costs Brokers Will Remain Unscathed in 2008 Transactions Ad/Edit Index Marketplace Classifieds Checking Out

Hotel & Motel Management - February 4, 2008

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