Hotel real estate investors can expect to increase their buying activity this year thanks to an abundance of equity capital and improving debt markets that will support a buoyant market for hotel trades this year, according to a new forecast published by Jones Lang LaSalle.
In the newly released Jones Lang LaSalle Hotel Investment Outlook report, U.S. hotel transaction volume for the year is predicted to surpass the $17.5 billion achieved last year, with a moderate increase to $18.5 billion. The report forecasts that a strong re-emergence of hotel financing driven by commercial mortgage-backed securities will propel debt liquidity to its highest level since 2007, while a combination of private equity funds and real estate investment trusts are expected to comprise as much as 70% of the sector's total acquisition volume.
‘We expect 2013 to be another strong year for hotel transactions,’ says Arthur Adler, Americas CEO of Jones Lang LaSalle's Hotels & Hospitality Group. ‘The U.S. remains the world's most liquid hotel investment market, which will lead the Americas region to transact approximately 55 percent of the global transaction volume. We should see global volumes top $32 billion this year.’
Jones Lang LaSalle is also forecasting investor interest in quality hotel product elsewhere in the Western hemisphere, with standout Caribbean markets in the Dominican Republic, Jamaica and Aruba and ‘dramatic transformations’ in several Latin American markets including Brazil, Chile, Colombia and Peru.