Q4/2010 HOTEL TRANSACTIONS UPDATE

US hotel transaction market snowballed in 2010, gathering momentum for 2011

 

 

Market M&A Trends for Q4 and Year 2010

  • 2010 US transaction volume shot above $8BN.  Global transaction volume also soared this year, not far from 2008 levels.
  • Q4 saw as many portfolio deals as Q3.
  • In Q4, there were several luxury non-US property sales that surpassed $1MM in average price per key (APPK).      
  • REITS (existing and newly formed) have dominated the M&A market this year.
    • Chatham Lodging Trust and Chesapeake Lodging Trust were the two hotel REIT IPOs.
  • Financing still weak but lenders coming back
    • For Q4, LTV for first mortgage debt trended between 40-55%, lower than the median LTV of 60% in 3Q, according to STR.
      • Most of the loans have a 3-5 year maturity.
    • According to Fitch, CMBS hotel loans continue to default at a relatively high rate.  November delinquencies reached 14.27%. 
    • Lenders—BofA, Deutsche, GS, Wells Fargo, and JPM—are returning, albeit slowly, to the hotel lending market.

Luxury Segment

  • Average Price per Key
    • $998,687 (9 transactions in Q4)
    • $529,161 (42 transactions in 2010)
      • US average: $383,831

Upper Upscale Segment

  • Average Price per Key
    • $257,295 (11 transactions in Q4)
      • US average: $291,945
    • $229,265 (42 transactions in 2010)
      • US average: $264,971

Q4/2010 HOTEL TRANSACTIONS UPDATE - hotel2

 

Q4 Transactions (Summary)

 

Q4/2010 HOTEL TRANSACTIONS UPDATE - HOTEL TRANSACTION