ATLANTA—How hot is the hotel market? Hotel Assets Group (AG) alone has sold or advised on 194 individual hotel transactions in the past two years alone.
“The current hotel transactional space is unlike any point in history,” says Brad Sinclair, a senior shareholder at Hotel AG. “We believe we are in the fifth inning of this cycle with a lot of road in front. But while we believe this cycle has two to four more years ahead, we also believe the future transaction space will be largely led by the firms with deep experience.”
Hotel AG closed 194 transactions in 2013 and 2014, which breaks down like this: 169 select service hotels, 25 full-service assets and 12 portfolios. Those deals included 17 Courtyard by Marriotts, 16 Fairfield Inns, 12 Residence Inns, 11 Springhill Suites, 6 Townplace Suites, 8 Marriott/Hilton/Starwood full-service hotels, 20 Hilton Garden Inn, 7 Homewood Suites, 13 Hampton Inn, 8 Hampton Inn & Suites, 5 Holiday Inn, 3 Holiday Inn Express, 1 Staybridge Suite, 8 Wyndham branded hotels, 17 Choice branded hotels, 3 Carlson branded hotels, 10 Red Roof Inn and 29 other branded and independent assets.
“Transactions are becoming more complicated due to very high PIP requirements, replacement value and new supply,” says Andy Broad, a senior partner of Hotel AG. “Navigating through these issues take a real expertise.”
Of course, it wasn't just Hotel AG that kept busy in 2014. The Jordache family spent $90 million on a South Beach hotel at the end of the year. A Hampton Inn is rising in Midtown Miami and the Yotel Hotel brand is right behind it in Downtown Miami. And I expect more hotels to trade hands and break ground in South Florida's hot hotel market this year—and other major metros nationwide.
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