Q2 HOTEL TRANSACTIONS UPDATE

Hotel transaction market continues to chug along at a good pace.

 

 

Market M&A Trends for Q2

  • Q2 US hotel transaction volume neared $4BN, lower than the ~$5BN seen in 1Q but enough to surpass all of 2010’s total volume.
    • Q2 US Upper Upscale Hotel Volume declined 30% QoQ but the number of transactions doubled and Average Price per Key grew 12% QoQ in Q2.
  • No surprise, REITs continued to dominate the M&A market in Q2; however, we did see a handful of transactions by Hyatt and Starwood.
  • There were more portfolio deals relative to Q1.
  • Hotel delinquencies have stabilized. The latest data from Fitch showed Q2, as of May, hotel delinquencies hit 13.9%, a little better than Q1’s 14.3%.
    • CMBS loans are seeing 60-70% LTV with 5-year terms of between 5.5% and 6.5%.
    • Rates on three- to five-year, fixed-rate deals, with 50% to 65% LTV, are in the 5% range. 
    • Lenders were more likely to fund longer-term (10-year) deals.

Luxury Segment

  • Average Price per Key
    • Q2 2011 Global average: $546,628
      • US average: $611,871 (5 transactions)
    • Q1 2011 Global average: $279,697
      • US average:  $289,733 (4 transactions)

Upper Upscale Segment

  • Average Price per Key
    • Q2 2011 Global average:  $320,937
      • US average: $327,187 (13 transactions)
    • Q1 2011 Global average: $257,295
      • US average: $291,945 (7 transactions)
Q2 HOTEL TRANSACTIONS UPDATE - hotel transaction1

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more