Big breakout to the upside, good for Starwood and other lodging companies with assets to sell
Upper upscale (UUP) & Luxury Transaction Trends for Q3 2013
- Q3 2013 worldwide hotel transactions (UUP & Luxury brands) was $5 billion, more than double Q2's volume and 85% higher than Q3 2012's volume. This bodes well Starwood, who are and have been, active sellers of hotels
- The number of US luxury/UUP hotel transactions (where price was disclosed) was 17 in Q3 2013 compared with 12 in Q2 2013 and in Q3 2012.
- The number of non-US luxury/UUP hotel transactions (where price was disclosed) was 7 in Q3 2013 compared with 8 in Q2 2013 and 6 in Q3 2012.
- As usual, REITs were very active.
- Hyatt sold two Andaz units for $394k APPK (average price per key) and Hyatt Regency Denver Tech Center for $133k APPK.
- Marriott sold 3 EDITION hotels that are under construction (London, NYC, Miami) for $973k APPK
- Host Hotels sold the Ritz-Carlton San Francisco for $479k APPK
- There were 9 multi-asset deals. Abu Dhabi was the buyer of two large upper upscale deals.
- Relative to a two-year trailing average, US average price per key (APPK) in the UUP segment rose 69% to $423k due to 3 transactions averaging a million dollar APPK
- According to Fitch, the hotel delinquency rate in September was 7.5%, lower than June's 8.4% and much lower than the delinquency rate peak of 14% seen in Q3 2011.