The high amount of transactions for the first half of the yearwas influenced by the CNL Hotels & Resorts acquisition byMorgan Stanley and Ashford Hospitality Trust; the acquisition ofEquity Inns by Whitehall Street Real Estate Funds; and theacquisition of Highland Hospitality Corp. by JER PartnersAcquisitions, de Haast says. The value of the three transactionscombined is about 20% of the total transactions for the first halfof the year, he says. The volume of transactions is higher,particularly in the North American market, and is driven by "REITSbeing taken private by the private equity players," he says. One ofthe largest transactions in the Americas was the acquisition of theMakena Resort by Morgan Stanley Real Estate Fund V US and theDowling Co. Inc. for $575 million.

The monetary value of transactions for the second half of theyear will be similar to the first half but will be influenced bythe acquisition of Hilton Hotels Corp. by Blackstone, de Haastsays. "Although the number will be big, the actual number oftransactions will decline slightly," he says. The largestpercentage increase in transactions is expected to be in AsiaPacific where there is projected to be a 70% increase from the $5.3billion worth of transactions in 2006 and the forecast $9 billionof transactions in 2007. "The absolute numbers are still prettysmall but that is where the long-term growth is going to be asinvestors seek opportunities in these fast growing markets," deHaast says.

The number of investors looking to buy hotels has increased and,according to the survey, global potential buyers outnumber sellersby nearly four to one with 43% looking to buy with only 11.5% ofinvestors planning to sell. There were 36.5% of investors planningto buy in the survey conducted by Jones Lang LaSalle Hotels lastNovember. Cap rates are continuing to tighten with investorswilling to reduce yield requirements to enter the market, accordingto the survey. The majority of respondents in the most recentsurvey were interested in buying upscale and luxury assets,according to the survey. Although in Asia Pacific, "all grades ofaccommodation" was the most chosen response for hotel asset thatinvestors sought to acquire. There is also an increase in thenumber of respondents planning to build hotels, with a total of23.4% expecting to develop hotels.