ATLANTA—Hodges Ward Elliott and Hotel AG advised Apple REIT 6 on its sale of a 66-property portfolio. The hotel portfolio was entirely Hilton and Marriott select service and full service hotels. Financial terms of the deal were not disclosed.
Specifically, there were two full service Marriott hotels, 14 Hilton Garden Inn, 10 Courtyard by Marriott, 10 Residence Inn, seven Springhill Suites, six Homewood Suites, five Fairfield Inn, five TownePlace Suites, four Hampton Inn, and three Hampton Inn & Suites. The 66 hotels were located across major US regions.
The sale is not surprising, given the state of the hotel market. In a March report, PKF Hospitality Research predicts domestic hotels will experience a 6.1% increase in RevPAR for the year, prompting a staggering 10.2% rise of NOI.
“Our pipeline looks fantastic,” says Bill Fortier, SVP of Americas development at Hilton Worldwide. “We added more than 500 properties last year, we could add 600 this year and possibly 700 in 2014.”
At least one such brand from Hilton's portfolio, Hampton Hotels, is a good example of the success of this hotel segment. The chain opened 22 new properties—adding 2,134 guestrooms—in the first quarter, kicking off an expected 90 openings this year. In 2012, 70 Hampton Hotels made their debut.
“We target select-service hotels because they are a more efficient and less-complex operating model with stronger margins,” adds Greg Merage, CEO of MIG Real Estate, which recently purchased its fourth such property in the Tampa, FL area, “and they offer a much lower investment cost per room compared to their full-service counterparts. Within this category, we like the 'power brands'—such as Marriott, Hilton, IHG, Hyatt—because of their robust marketing engines and successful loyalty programs.”
Brokers representing the two firms include Bill Hodges and Mark Elliott of Hodges Ward Elliott. H. Keith Thompson and Brad Sinclair of Hotel AG also worked on the deal.
Rayna Katz contributed to this story.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
