L.A. Is a Top Market for Hotel Investors

Chris Muoio is the senior quantitative strategist at Ten-X.

LOS ANGELES—Los Angeles is one of the top buy markets in the country. Ten-X has named Los Angeles the fourth top buy market, behind Las Vegas, Jacksonville, Sacramento and ahead of Indianapolis. While the hotel market in general is slowing, the Los Angeles market benefits from a strong economy fueling demand for hotel rooms as well as limited hotel supply growth. The city has an 81% occupancy rate that is approaching peak levels, and RevPAR growth is at 10% year-over-over.

The strong performance is creating a strong market for buyers as well as sellers, who are looking capitalize on this performance. “The reason L.A. has a stronger outlook than other markets is because it has a fairly limited supply pipeline on the horizon,” Chris Muoio, senior quantitative strategist at Ten-X, tells GlobeSt.com. “This will help make its next downturn milder than other hotel markets—especially trophy hotel markets—which are facing robust supply pipelines that will further depress occupancies next time demand turns south. LA is also a large, liquid market with global recognition.”