Q3 HOTEL TRANSACTIONS UPDATE

10/07/10 03:38PM EDT

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)

Q3 HOTEL TRANSACTIONS UPDATE - transaction1x

Q3 HOTEL TRANSACTIONS UPDATE - transaction2x

Q3 HOTEL TRANSACTIONS UPDATE - transaction2

Q3 HOTEL TRANSACTIONS UPDATE - transaction3

Q3 HOTEL TRANSACTIONS UPDATE - transaction4

© 2024 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.