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Scarce transactions close out the year, though volume was better  

Upper upscale (UUP) & Luxury Transaction Trends for Q4 2012 

  • Q4 2012 worldwide hotel transaction volume (UUP & Luxury brands) was $3.2 billion, up from Q3 2012's $2.7 billion, and higher than Q4 2011's $1.3 billion. 2012 transaction volume reached almost $10 billion, lower than the $11 billion in 2011.
  • The number of US luxury/UUP hotel transactions was 9 in Q4 2012 compared with 12 in Q3 2012 and 9 in Q4 2011. 
  • The number of non-US luxury/UUP hotel transactions was 3 in Q4 2012, compared with 6 in Q3 2012 and the 11 in Q4 2011.
  • There were two portfolio deals: 1) The Government of Singapore Investment Corp. bought the Grand Wailea on Maui, the La Quinta Resort & Club and PGA West golf course in La Quinta, Calif., the Arizona Biltmore Resort & Spa in Phoenix - which are all managed by Waldorf Astoria Management under Hilton Worldwide’s Waldorf Astoria Hotels & Resorts brand - and Claremont Resort & Spa in Berkeley, CA.  The seller was a joint venture led by Paulson & Co. which had taken over the properties in a bankruptcy deal as part of a $600 million restructuring of Morgan Stanley's real estate funds.  The hotel properties then filed for Chapter 11 bankruptcy protection. 2) Host hotel's European JV bought five hotels from Whitehall - Paris Marriott Rive Gauche Hotel & Conference Center, Renaissance Amsterdam Hotel, Renaissance Paris La Defense Hotel, Renaissance Paris Vendome Hotel, and the Courtyard Paris La Defense West – Colombes. 
  • Relative to a seven quarter trailing average, US average price per key (APPK) in the UUP segment is in-line at $266k.  Non-US APPK in the UUP segment moved to $360k, 15% higher than its seven quarter trailing average. 

Other Chain Scale Trends for Q4 2012

  • There were two large M&A transactions:  1) Apple REIT 6 was sold to BRE Select Hotels Corp (a Blackstone affiliate). 2) InTown Suites was sold to Starwood Capital Group.
  • According to Fitch, the hotel delinquency rate in November was 9.83%, lower than the 10.82% seen in August.  The delinquency rate remains well below the relative high of 14% seen in Q3 2011.