CHICAGO-Jones Lang LaSalle Hotels managingdirectors Al Calhoun and MarkFair tell GlobeSt.com that the select service properties,the mid-tier segment ranging from properties worth $5 million to$20 million, should see a doubling of portfolio sales this year. Ascorporate demand increases, investors are looking to expandholdings of these properties across the country, they say.

Calhoun says the increased demand is expected to bolsterperformance for the the entire hospitality industry in 2012,especially the branded properties and distressed sites.“Competitive bidding on auction sales and the purchasing offoreclosures and distressed assets, albeit at a slower pace, willalso allow investors to acquire assets at a discount to replacementcost,” he says. Redevelopments of mid-tier properties face strongbuyer demand, Calhoun says, though these properties could requireoverdue upgrades and capital infusions in the coming year to keephotels at brand standards.

Fair says he believes enough demand will build up to see thestart of new construction by 2014. Right now, however, Fair sayslenders are using capital allocated to the hotel sector foracquisition financing, and there are ample opportunities for thedebt they have to deploy. “New construction financing is stillhighly selective and will remain so through 2012,” Fair tellsGlobeSt.com.