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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

Delinquency rate

  • 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.

Q3 2013 GLOBAL HOTEL TRANSACTIONS (UUP/LUXURY) - 1

Q3 2013 GLOBAL HOTEL TRANSACTIONS (UUP/LUXURY) - 2

Q3 2013 GLOBAL HOTEL TRANSACTIONS (UUP/LUXURY) - 3

Q3 2013 GLOBAL HOTEL TRANSACTIONS (UUP/LUXURY) - hotels