Since we're always asked about the M&A market during earnings season, we've highlighted a few trends below.
MARKET TRENDS for the 3Q
- Average Key Per Price for luxury/UUP transactions in 3Q rose to $350k, which was higher than the YTD average of $300k.
- Global transaction volume of $9.9BN topped last year’s level of $9.0BN.
- US transaction volume is closing in on $5BN, up 106% YoY. The bulk of transactions continue to be single-asset and Luxury/UUP.
- REITS (existing and newly formed) have dominated the M&A market so far.
- Access to capital continues to be limited.
- According to Fitch - CMBS hotel loans defaulted at a higher rate (20%) in August than July (18.6%)
LUXURY/UUP MARKET
- Average Key Per Price
- US $359,795 since 6/30/2010 (13 transactions)
- $301,886 YTD (33 transactions)
- International
- $279,784 since 6/30/2010 (11 transactions)
- $427,097 YTD (24 transactions)
- Cap rates/Valuation
- 5-6% range, in line with 2006 cap rates
- 9-11x EBITDA; however, two luxury hotels recently sold at 17-18x EBITDA
Q3 Transactions (Summary)
