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Takeaway: US UUP transaction volume remains lower year-over-year

M&A and Other Trends for Q3 2012

  • Q3 2012 US hotel transaction volume was $2.6 billion, up from Q2 2012's $1.5 billion, but lower than Q3 2011's $2.8 billion.
    • The number of US luxury/upper upscale hotel transactions were almost unchanged QoQ and YoY 
    • There was a pickup in multi-asset sales
    • Relative to a 6 quarter trailing average, US average price per key (APPK) in the Upper Upscale segment fell 29% to $190k - One reason that Upper Upscale pricing is down is that many of the hotel transactions had a lot of deferred capex and were in secondary cities
    • There were two transactions that surpassed $1MM in APPK:  New York's Plaza Hotel and the Cavendish Hotel in London
    • Starwood Hotels sold the W Los Angeles and the W Chicago to Pebblebrook Hotel Trust and Chesapeake Lodging Trust, respectively
  • According to Fitch, August hotel delinquency rate was 10.82%, slightly lower than May's 11.15%.  The delinquency rate remains below the 14% seen in Q3 2011.
  • According to STR, YTD cap rate has been 9.3%.  The average interest rate is 4.25%.

Q3 HOTEL TRANSACTIONS - appk2

Q3 HOTEL TRANSACTIONS - luxury

Q3 HOTEL TRANSACTIONS - uup