WASHINGTON, DC-Expect hotel activity to increase in 2013. So say local executives at hotel advisory firms, namely newly appointed local executives. Hotel verticals are among the commercial real estate firms that are realigning and adding to their executive ranks this month and GlobeSt.com reached out to two to get their take on what is happening in the space.
There hasn’t been much hotel-related activity in the Mid-Atlantic, says Ketan Patel, the newly-promoted SVP at HREC’s Washington, DC office. It is not that the Mid-Atlantic isn’t an attractive market, he tells GlobeSt.com—it is. “What happens is that assets come to market, they get picked up quickly and they trade for a nice premium.” Hotels in the area, Patel says, tend to be owned by long-term holders, especially given the barriers to entry and the markets being more stable than other areas. DC hotels will see an uptick in business this year, Patel says, especially with the presidential inauguration coming up. “Washington DC is, of course, the Capitol and there are a lot of strong, stable demand generators.” That said, he continues, “I don’t think DC will be a super strong market in the near term.”
Patel currently has four deals under contract that are expected to close in the first quarter of 2013.
DC’s hotels are currently at the bottom of the Revpar cycle, says Laura Wolinsky, who just joined Hunter Hotel Advisors Capital Markets division as vice president. “We expect to see more transactions come to market, especially for properties that need financing,” she tells GlobeSt.com. In general, hotel financing is in clear recovery mode, Wolinsky says. “Debt financing is definitely coming back and CMBS financing is leading the way.
“So many loans that are coming due that will have to be refinanced. We will see lenders either forcing a sale or some kind of recapitalization.”