U.S. hotel transaction volume up 126% in first quarter

UNITED STATES The transaction market for U.S. full-service hotels soared in the first quarter, albeit from a relatively small base in 2010, according to data from Real Capital Analytics.

Volume of full-service hotel transactions increased 180% year over year in the first quarter, making it the most traded segment of commercial property transactions aside from office space in commercial business districts, which spiked 300% over the year-ago period. However, sales of limited-service hotels, which was among the most traded commercial property segments last year, has slowed considerably in 2011.

Overall, U.S. commercial property sales totaled US$31 billion in the first quarter—a 69% year-over-year increase. Office transactions overall more than doubled with a 127% increase, just ahead of total hotel volume, which posted a 126% gain.

However, the increased transactional velocity coincides with a decline in pricing. Overall U.S. commercial property sale prices fell 3.3% in February—the third straight monthly decline.