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.
- For Q4, LTV for first mortgage debt trended between 40-55%, lower than the median LTV of 60% in 3Q, according to STR.
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
- $257,295 (11 transactions in Q4)
Q4 Transactions (Summary)
