In his semi-annual market report and update, Dundon says recent surveys show the Westside hotel market that serves the high tech corridor is firming up and that despite rumors of its trouble, the airport market is reporting a slight increase in revenue per available room. As for the future, Dundon says prospects for a continuing rebound throughout Portland are "positive, subject to the economic uncertainties," in part because "supply additions have been reduced to a trickle."

Projects currently planned or under construction total about 1,200 rooms. The number is down from September of 2000, when well more than 1,500 rooms being planned or built. Two planned projects were abandoned during that period, says Dundon. There are currently 20,601 rooms in the Portland metro market quoting corporate single-room rates of $40 or more.

The hotel investment market is "continuing to proceed at a modest pace," says Dundon, but is expected to increase. "This trend will be driven by more older properties coming onto the market due to the inability to compete over the past few years with the new supply additions to the market," says Dundon. "In addition, buyers are becoming more active in the Pacific Northwest as they realize that our market is at the bottom of the curve and they want to capture the increases in revpar expected in the future."

Larger assets will be more difficult to sell as institutional debt and mezzanine financing is scarce and expensive, says Dundon. Private equity, where available, is looking for strong returns, he says.