Hotel Lenders and Investors at Ease With Direction of Investment Market - MarketWatch - 0 views
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Lower interest rates, revenues that are outpacing expense growth and below average supply additions are combining to give lenders and investors a greater comfort level with the U.S. lodging investment market,
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"Double-digit profit growth, coupled with the low cost of capital and limited supply growth, make hotel real estate an attractive option to commercial real estate investors," said Scott Smith MAI, vice president in the Atlanta office of PKFC
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"Institutional investors and private equity funds are showing a bias towards full-service and resort hotels in the major markets, where profit growth has been the greatest,"
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The article discusses how hotel lenders and investors have found success with the direction of the investment market. According to the 2012 edition of the Hospitality Investment Survey, lower interest rates along with revenues that are outpacing expense growth are combining to provide investors with a greater level of comfort in regards to the U.S. lodging investment market. According to Scott Smith, vice president of PKF Consulting USA, the double digit growth of profits along with low capital and limited supply growth has made hotel real estate much more attractive to commercial real estate investors. Smith notes that institutional investors as well as private equity funds are more inclined to invest in full service hotels existing in the major markets, which has shown the most profit growth. According to the text, investments in the hospitality industry will continue to remain attractive to investors due to the expected continued improvement in industry performance along with the availability of cheap capital.