This particular cycle has lasted longer than usual because nosupply entered the market after 9-11 for several years, heexplains. However new supply is starting to enter the market and isexpected to have an affect on existing assets. "Now is the perfecttime to sell because pricing is still strong and the cost of debtfinancing for hotels is still low."

"In the Washington, DC area, for example, we recently got arequest to look at a four-hotel portfolio for financing." Larkinsays that the owner was looking at a cap rate in the low 7s. "Idon't know what a new owner can do to the property to achieve areasonable return," he says.

Whatever the rationale, anecdotally it seems as though morehotels and hotel companies are being traded. The most recentexample is the Bethesda, MD-based Host Hotels & Resorts, whichhas sold seven assets since the beginning of the year for anapproximate aggregate price of $333 million. By the end of theyear, the company expects to have sold up to $500 million inassets, a spokesman tells GlobeSt.com. According to him, thesesales are part of Host Hotels' regular program of cycling capitalthrough its portfolio.