US H1 hotel transactions hit $6 billion: STR Analytics

Almost US$6 billion in hotel transactions occurred in the U.S. during the first half of 2012, according to new data from STR Analytics.

“The investment landscape for hotels has obviously changed since last year,” said Steve Hennis, director at STR Analytics. “Deal flow has tapered since 2011, particularly in the luxury segment. Additionally, there has been a shift in buyer strategy to some degree with fewer distressed sales and less activity by real estate investment trusts.”

Key findings included:

  • Only 13% of transactions involved distressed assets, a sharp decline from 2011 when almost one out of three asset trades included struggling properties
  • Only 16% of hotel acquisitions were by REITs, a noticeable decline from 2011 when 35% of purchases were by REITs
  • The average room revenue multiplier was 3.9, a modest drop from the average multiplier of 4.2 in 2011
  • Surprisingly, the average cap rate declined to 9.2% in 2012 from 10.5% in 2011